Reconstruction snafu lands homeowner’s insurer in court

Is insurance agent liable for underinsured fire loss?

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David Meisel purchased an Allstate Insurance Co. homeowner's insurance policy from agent Thomas J. Anderson. Some time thereafter, Meisel's house was totally destroyed due to a faulty electric drop line to his house from the public utility transformer. Through his insurance agent, Meisel reported the fire loss to Allstate, which referred the claim to its adjuster, Tom Reed. The adjuster told Meisel he had full replacement value on his house for $320,000. After negotiations, Allstate's recommended contractor agreed to rebuild the house for $354,000. Purchase Bob Bruss reports online. Reed told Meisel the $320,000 structure policy limit could be combined with the $145,000 contents coverage to pay for the reconstruction. Based on this representation, Meisel hired the contractor. But while the house was partially reconstructed, Reed told Meisel the structure was only insured for $220,000 rather than $320,000, and Allstate would withhold substantial sums for depreciation costs on the co...