An insurance agency renewed a package policy for a warehouse company requiring, under property coverage on various locations, that the insured "....carry 90 percent of the actual cash value (ACV) as respects buildings and contents." A loss occurred for which appraisers agreed on a figure based on actual cash value adjustment. Disputing the settlement amount, the insured alleged "unfair and deceptive business practices" in a suit brought against the insurance agency.

The insured alleged, in pertinent part, that the agency ".... misrepresented pertinent facts and/or insurance policy provisions relating to the coverages at issue in the new policy....that plaintiffs were uninformed concerning these coverages and were relying on the representations of defendants." Appeal followed granting of summary judgment by the trial court in favor of the insurance agency.

The appeal court found that the insurance agency had not violated a North Carolina "unfair claim settlement practice" statute "with such frequency as to indicate a general business practice," allegedly "misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue...." The insured then argued that, in the absence of such a violation, the agency violated another statutory provision relative to unlawful "....unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce...."

The insured said that it believed, from comments by a representative of the agency, that insurance was provided for full replacement cost rather than actual cash value. However, a letter from the agency to the insured was introduced in which actual cash value was defined and which stated that actual cash value was not replacement cost, and not that "it will probably not be in your best interest to insure on a replacement cost basis." It further said that the enclosed renewal policy would be assumed to be in order unless the insured advised otherwise. The previous policy, arranged by a different agency, had provided property coverage on an actual cash value basis.

The insured's president forthrightly acknowledged that insurance agency representatives did not specifically state that partial loss situations would be adjusted on a replacement cost basis, nor that depreciation would not be applied to them. The appeal court found, from the evidence, that the alleged deception was not supported and that the insured was provided with the exact coverage for which it contracted.

The judgment of the trial court was affirmed in favor of the insurance agency and against the insured.

(BELMONT LAND AND INVESTMENT COMPANY ET AL., Plaintiffs v. THE STANDARD FIRE INSURANCE COMPANY ET AL., Defendants. North Carolina Court of Appeals. No. 9027SC643. May 7, 1991. 403 S.E.2d 924. CCH 1991-92 Fire and Casualty Cases.)