The Illinois Appellate Court affirmed a trial court's judgment in favor of an insurer, finding an insured is entitled to recover the actual cash value, rather than the replacement costs, of its damaged property. Moreover, the insured was not entitled to statutory penalties for the insurer's refusal to settle the insured's claim. Area Erectors Inc. brought a declaratory judgment action against The Travelers Property Casualty Company of America seeking a declaration that it was entitled to recover the replacement costs of its damaged property and seeking statutory penalties from Travelers for its vexatious refusal to settle its claim. At issue was the measure of the valuation of the property under the policy. In its complaint, AEI alleged an American 7150 crane it owned was damaged when an unexpected microburst storm came through a construction site and toppled concrete walls onto the crane. Two days later, a Link-Belt crane owned by AEI was damaged in an unrelated incident when the boom hoist cable snapped and fell onto the manlift. AEI filed claims under its Travelers commercial inland marine insurance policy for the two damaged cranes. AEI argued it was entitled to recover the replacement cost for the loss of the American 7150 crane. Travelers argued AEI was entitled to recover the actual cash value of the equipment under the policy, a lesser sum than replacement cost. Travelers determined the 7150 crane was a total loss and offered $379,868 in settlement of AEI's claim on the crane. This sum represented what Travelers calculated as the actual cash value of the crane less a $25,000 deductible. Travelers alleged it tendered the proper amount due under the policy, which was the actual cash value of the crane as specified under paragraphs A and B of the 'Contractors Equipment' Coinsurance and Valuation' endorsement. The trial court granted Travelers' motion for judgment on the pleadings, finding the actual cash value was the proper valuation under the policy.

A lawsuit alleges that Travelers Property Casualty Company of America failed to pay its obligations on a policy covering property in Anaheim, Cal. According to the lawsuit, the insured, 50 South Anaheim L.L.C., was forced to evict a tenant for failure to pay rent. The lawsuit alleges the tenants retaliated by vandalizing the property. South Anaheim then submitted the claim to Travelers. The lawsuit claims that Travelers failed to properly adjust the claim and owes more than $200,000 under the policy.