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March 09, 2022 Feature

Belaboring Depreciation: The “Labor Depreciation” Insurance Class Action Tidal Wave

Todd A. Noteboom and William D. Thomson
uzenzen/iStock via Getty Images Plus

uzenzen/iStock via Getty Images Plus

Labor-depreciation defendants should focus courts’ attention on the purpose of “actual cash value” coverage: returning insureds to their pre-loss economic condition, not their pre-loss physical condition.

Imagine your house has been hit by a windstorm, causing significant damage to your 10-year-old roof. Fortunately, you are not worried: you have homeowners insurance that entitles you to the “actual cash value” of any damaged property. But when your insurance check arrives, it is smaller than you had hoped. Curious, you call your insurer and ask to see a detailed estimate of the loss. What you get back is an itemized estimate of the cost to repair your roof, minus depreciation to account for the roof’s age. That the insurer is applying depreciation does not surprise you; you know that your insurance policy permits that. But you are surprised to see that your insurer is depreciating not just the cost of the materials needed to repair your roof but also the cost of the repair labor itself. Can that be right? you ask yourself. How can something intangible like labor depreciate in value? But when you raise this with your insurer, your insurer explains that not only does your policy permit it to depreciate labor costs, but it has to do so to accurately value your roof and avoid giving you a windfall. Unsatisfied, your next call is to your attorney . . .

If this fact pattern seems at all far-fetched, it should not—it has been the genesis of scores of class action lawsuits nationwide over the last decade, which have collectively cost insurers hundreds of millions of dollars in settlement payments. These lawsuits all ask the same question: When estimating the actual cash value of damaged property, can an insurer depreciate the total value of the property—including both the material and labor components of its value—or just the cost of the materials alone? This seemingly simple question has divided courts across the country, and it continues to do so with remarkable frequency. Just last year, for instance, the Illinois and South Carolina Supreme Courts lined up on opposite sides of the divide, while the Arizona Supreme Court looks likely to join the fray in the next few months.

Much of the division among courts stems from some basic misunderstandings about the nature of “labor depreciation” claims and the insurance policies on which they are based. And many of the losses to insurance companies can be avoided through steps that the industry is only belatedly taking. This article traces the history of labor depreciation class actions, the arguments made by the parties, and the often-conflicting ways in which courts have tried to resolve the issue. It concludes by offering some observations in an attempt to cut through the confusion that has plagued the case law, and some recommendations for how insurers can protect themselves going forward.

Property Insurance Coverage and Valuation Practices

Before diving into a discussion of labor depreciation cases, it is helpful to understand the two different types of coverage offered by a typical homeowners policy, as well as the way in which insurers typically value losses under those coverages.

“Actual cash value” versus “replacement cost” coverage. Historically, only one type of coverage was available for homeowners in the United States: actual cash value (ACV) coverage.1 Under this coverage, insureds who suffer a covered loss are entitled to receive the cash value of their damaged property as it was immediately before the loss—no more, no less. Because damaged property is rarely brand-new at the time of loss, ACV policies typically provide that the insurer may take the property’s pre-loss depreciation into account when determining its value.

Because ACV coverage includes depreciation, courts and commentators have long recognized that it can “work a hardship” on property owners: an ACV payment often will be insufficient to fund the full repair or replacement of damaged property with new construction.2 Thus, for example, homeowners who lose a 50-year-old house likely will be unable to replace that house with brand-new construction for the amount of their ACV payment alone.

Because of this “hardship,” another form of property coverage has arisen: replacement cost (RCV) coverage.3 RCV pays the full, undepreciated cost to repair or replace damaged property with new, equivalent construction. Thus, for example, homeowners who lose a 50-year-old house can rebuild it and recover their full replacement costs from their insurer.

Unlike ACV, however, RCV payments are made only if insureds actually repair their property. This restriction is intended to avoid giving insureds a financial windfall that might induce insurance fraud: they cannot lose a 50-year-old house but get paid for a brand-new one unless they then spend the money on rebuilding the house. Generally, RCV policies provide that homeowners who fail to repair their damaged property are entitled to receive only an ACV payment. Conversely, ACV policies often allow policyholders who repair their property after receiving an ACV payment to recover their additional expenses in the form of a supplemental RCV payment.

In sum, ACV and RCV work on different principles: whereas ACV attempts to put insureds in the same economic condition they were in before the loss, RCV puts insureds in the same physical condition they were in before the loss by allowing them to rebuild their damaged property. Both accomplish indemnity, but in different ways.4

Determining the value of a loss. Determining RCV is simple: the insurer merely needs to know how much it cost to rebuild the property. Determining ACV is harder: there is no market one can examine to see, for example, what the “value” of a 17-year-old roof is. Accordingly, a number of methods have arisen for estimating the ACV of damaged property.5 In practice, however, insurers tend to follow the same basic approach: they use loss-estimating software to estimate the cost to replace damaged property with new property, and then apply depreciation to achieve the pre-loss value.

The loss-estimating software works by dividing a repair job into different line items—for example, purchasing new shingles or tearing off the old ones—and then estimating the cost for each individual item. The software then permits the insurer to decide whether to apply depreciation to a given item. For example, the software might have a setting that allows it to depreciate only the cost of construction materials, such as new shingles, and another setting that allows it also to depreciate labor tasks, such as tearing off the old shingles. Once the insurer selects the desired depreciation settings, the software generates an overall estimate of total repair cost minus depreciation.

The Labor Depreciation Tidal Wave

Many insurers set their depreciation settings to depreciate both the cost of materials and the cost of repair labor. Insureds discovering this have not always been pleased. They often conclude, upon reviewing their loss estimates, that depreciation should only be applied to tangible items like shingles or drywall, and not an intangible item like repair labor. Insurers disagree. The result has been lots of litigation.

The first drop of the flood: Redcorn. In 2002, the first major case addressing the propriety of labor depreciation—Redcorn v. State Farm Fire & Casualty Co.6—reached the Oklahoma Supreme Court. Both the arguments made by the parties and the split reactions of the justices typify many of the labor depreciation cases that have followed.

In Redcorn, the plaintiff’s 16-year-old roof was damaged in a storm. State Farm estimated the value of the loss by determining the total cost to repair the property—including materials and labor—and depreciating it to account for the roof’s age. The plaintiff objected, claiming that depreciating both materials and labor violated the principle of indemnity because it would leave him unable to return his property to its pre-loss state. He argued that he was entitled to the full cost of repair labor so that “if it were possible to purchase depreciated shingles,” he would have the money necessary to pay someone to put them back on his roof and restore his home to its pre-loss condition.7

In a 5–3 decision, the Oklahoma Supreme Court rejected this argument. The court explained that a roof is the indivisible “product of both materials and labor.”8 To depreciate only the material component of its value would over-indemnify the insured because “indemnity is served by considering the age and condition of a roof, both materials and labor, in setting an amount of loss.”9 As the court noted, the plaintiff “insured a roof surface, not two components, material and labor,” and did not “pay for a hybrid policy of actual cash value for roofing materials and replacement costs for labor.”10 “To construe the policy in such a manner would unjustly enrich the policy holder.”11

Justices Boudreau and Summers filed separate dissents. Justice Boudreau rejected the majority’s premise that a roof is “a single product.”12 Instead, he viewed it as “a combination of a product (shingles) and a service (labor to install the shingles).”13 Although the shingles themselves were “logically depreciable” because they suffer wear and tear over time, labor is not depreciable because it does not “lose value due to wear and tear.”14 Moreover, Justice Boudreau concluded that failing to pay the plaintiff the full cost of labor would under-indemnify him because it would leave him unable to return his house to its pre-loss state.15

Justice Summers came to the same conclusion. As he pithily put it, “[b]efore the damage the insured had on his house a roof with sixteen-year-old shingles. After the damage, [he] is contractually entitled to have on his house sixteen-year-old shingles, or their value in money. He should not bear any of the cost of installing them.”16

The floodgates open: Adams and afterward. Perhaps because of that defendant-friendly result, there was a roughly decade-long lull in labor depreciation cases following Redcorn. That changed dramatically following the Arkansas Supreme Court’s 2013 decision in Adams v. Cameron Mutual Insurance Co.17 In a short opinion, the court agreed with the Redcorn dissenters that labor is not “logically depreciable” and that depreciating labor would under-indemnify the insured.18 Accordingly, the court found it ambiguous whether the term “actual cash value” permitted labor depreciation and consequently ruled for the insured under the doctrine of contra proferentem.19

Although Adams was swiftly abrogated by statute,20 it opened the litigation floodgates. Since Adams, countless labor depreciation class actions have been brought in jurisdictions across the country. This flood has provoked a sharp split among courts, with a slight majority agreeing that insurers can depreciate labor costs, and an almost equal number coming to the opposite conclusion. Among the many courts that have weighed in are the Oklahoma, Arkansas, Minnesota, Nebraska, Tennessee, North Carolina, South Carolina, and Illinois Supreme Courts and the U.S. Courts of Appeals for the Fifth, Sixth, Eighth, and Tenth Circuits.21

Plaintiffs’ and Defendants’ Arguments

Despite the multiplicity of cases, plaintiffs and defendants in labor depreciation cases have tended to make the same basic arguments.

Plaintiffs’ arguments. Labor-depreciation plaintiffs typically focus on three basic arguments. First, plaintiffs usually argue that allowing insurers to depreciate labor costs would leave homeowners with a significant out-of-pocket loss, which is contrary to the indemnity purpose of insurance. As reflected by Redcorn, plaintiffs making this argument try to convince courts that the purpose of ACV coverage is not just to give homeowners the pre-loss cash value of their property but to give them enough money to actually restore the property to its pre-loss condition. Thus, based on this view, homeowners who lose a 30-year-old deck in a windstorm are entitled not just to whatever a 30-year-old deck is worth, but rather to a cash payment sufficient to allow them to recreate the 30-year-old deck. In plaintiffs’ view, this means a payment that would allow them—hypothetically—to purchase 30-year-old materials (e.g., weather-beaten wood, rusty screws, flaking paint, etc.) and then pay someone to fabricate that material into a deck. Because the labor costs associated with this exercise would be no different from the labor costs necessary to build a brand-new deck (and, theoretically, could be even higher given the added difficulty of working with aged materials), plaintiffs argue that the only way to return them to their pre-loss condition is to pay them the full, undepreciated cost of labor. Anything less leaves them in a worse position than before the loss—and thus under-indemnifies them.

Second, plaintiffs make an intuitive argument: labor, unlike materials, is intangible. Thus, plaintiffs argue, it cannot depreciate. As the dissent in Redcorn colorfully put it, “[t]he very idea of depreciating the value of labor is illogical. The image that comes to me is that of a very old roofer with debilitating arthritis who can barely climb a ladder or hammer a nail. The value of his labor, I suppose, has depreciated over time.”22 Although this argument has intuitive appeal, it depends on convincing courts that the value of damaged property—for example, a roof or a garage—can meaningfully be divided into materials and labor components. To nudge courts toward this conclusion, plaintiffs frequently point to the insurance industry’s own valuation practices. As discussed above, the software that insurers themselves use to value property divides the cost to repair property into material and labor line items. Thus, plaintiffs argue, insurers have essentially admitted that property value is divisible into material and labor components.

Finally, labor-depreciation plaintiffs—like many plaintiffs asserting breach of an insurance policy—tend to argue that the relevant policy language is at least ambiguous and thus must be interpreted against the insurer and in favor of the insured. In so arguing, plaintiffs are helped by the fact that insurance policies frequently do not define the terms “actual cash value” and “depreciation” and thus do not spell out whether labor costs will be subject to depreciation. Plaintiffs are also aided by the ever-growing split between courts over whether insurance policies permit labor depreciation. After all, if dozens of judges have disagreed on this issue, how can the policy be anything but ambiguous?

Defendants’ arguments. Insurers, of course, tend to argue the opposite. First, defendants usually argue that the purpose of ACV coverage is not to allow homeowners to restore their property to its pre-loss condition. Instead, it is simply to give them the pre-loss cash value of their property, which, insurers argue, is not the same thing as the cost to repair or replace it. To illustrate, an insurer might argue that the pre-loss cash value of a 30-year-old deck is often next to nothing—particularly if the deck has become rotten and unusable. The cost to rebuild it, however, will be much greater: although 30-year-old materials might cost very little (assuming that they could be found), the labor costs to reassemble them would likely be several thousand dollars. To pay homeowners several thousand dollars for a rotten, unusable deck would be to give them a substantial windfall. In the same vein, insurers point out that it is not ACV coverage that is meant to allow homeowners to repair or replace their property, but RCV coverage. To accept plaintiffs’ argument that an ACV payment should allow homeowners to restore their property is to conflate these two types of coverage—and often to give homeowners more coverage than they paid for.

Second, insurers argue that plaintiffs are performing a sleight of hand by focusing judges’ attention on the abstract question of whether labor depreciates. Insurers argue that this is irrelevant because the value of a roof, for example, is not meaningfully divisible into two separate components: materials and labor. Instead, a roof is the indivisible product of labor working on materials to create a brand-new product. Applying depreciation only to the price of the shingles and nails that make up that roof would leave the value of the roof significantly underdepreciated—and thus give homeowners a substantial windfall.

Finally, insurers often argue that questions of how property value should be determined and whether a given insured was adequately indemnified should be left to the finder of fact, not decided as a matter of law. This argument is easier in jurisdictions that follow the “broad evidence rule,” under which fact finders are given particularly broad latitude to decide what evidence to consider or reject when deciding property value.

Courts’ Resolutions of These Issues

Although labor-depreciation plaintiffs and defendants tend to make the same basic arguments, courts have been anything but uniform in their responses. Despite the lack of uniformity, however, opinions generally fall into a few basic categories.

Decisions focusing on the policy language and holding it permits labor depreciation. Many courts have eschewed philosophical discussions about whether labor “logically” depreciates and instead have focused on simple textual interpretation of the relevant policy language. These decisions often focus on the fact that the policy language does not specify that depreciation will be applied only to materials and not labor; indeed, the relevant policy language rarely mentions materials or labor at all. Instead, policies frequently say only that “depreciation” may be applied when determining the “actual cash value” of the damaged “property.”

In these circumstances, courts have often been reluctant to read a distinction between materials and labor into the policy. Thus, the U.S. District Court for the Western District of Missouri ruled for the insurer in Riggins v. American Family Mutual Insurance Co. on the grounds that “nothing in Plaintiff’s policy language limits or excludes labor from the depreciation calculation, signifying that the depreciation relates to the depreciation of the total estimated cost to repair or replace the property.”23 The Nebraska Supreme Court put it even more succinctly in Henn v. American Family Mutual Insurance Co.: the “policy does not distinguish between materials and labor, and we refuse to read that distinction into the policy.”24

Other courts have turned to the dictionary for guidance. Both the Eighth and Tenth Circuits have concluded that the definition of “depreciation” in Black’s Law Dictionary supports the conclusion that depreciation applies to both materials and labor.25 As the Tenth Circuit explained in Graves v. American Family Mutual Insurance Co.:

Black’s Law Dictionary describes ten different depreciation methods, none of which involves distinguishing materials from labor costs. Rather, its descriptions focus on the asset itself and various approaches to determining its value as a whole. Based on the plain and ordinary meaning of “depreciation,” a reasonably prudent insured would not expect the insurer to apply such an unorthodox depreciation method [as distinguishing between materials and labor] when determining actual cash value.26

The Sixth Circuit, in contrast, concluded in Hicks v. State Farm Fire & Casualty Co. that the exact same dictionary definition showed that “a reasonable insured could conclude that labor does not depreciate” because Black’s Law Dictionary defined “depreciation,” in part, as “a decline in an asset’s value due to use, wear, obsolescence, or age”—concepts not easily applied to labor.27

Decisions focusing on the policy language and finding it ambiguous. In contrast to Riggins, Henn, and similar cases, some courts have looked at the policy language and concluded that the failure to address whether depreciation applies to labor renders the policy ambiguous. In Perry v. Allstate Indemnity Co., for example, the Sixth Circuit noted that the insurance policy at issue did not define “depreciation” even though the insurer “could have removed any ambiguity by simply writing its policies to expressly include labor depreciation when calculating ACV.”28 Without a definition, both the insured’s view that depreciation did not encompass labor and the insurer’s belief to the contrary were reasonable. Thus, the court concluded that the policy was ambiguous and, under the doctrine of contra proferentem, must be interpreted against the insurer.29

Increasingly, courts have also concluded that the growing split in authority among courts is itself evidence of ambiguity. Thus, the Sixth Circuit in Perry emphasized that the insured’s interpretation “has been recognized as reasonable by numerous state and federal courts”; and “[t]hough a slim majority of courts may have gone the other way, that does not matter for our purposes because we do not ask whose reading is ‘more reasonable,’” only whether both interpretations are reasonable.30 In its recent decision in Sproull v. State Farm Fire & Casualty Co., the Illinois Supreme Court likewise emphasized that courts were split and that the insured’s interpretation had substantial judicial support—suggesting that it was reasonable and that the policy was thus ambiguous.31

Decisions focusing on whether labor depreciation is “logical” or appropriately indemnifies the insured. As indicated by the Redcorn dissents, a number of courts have focused on the question of whether labor depreciation is “logical.” Perhaps unsurprisingly, courts that frame the issue this way often conclude that it is not. The Arkansas Supreme Court has twice noted its agreement with the Redcorn dissenters that labor does not decline in value over time, and thus the “concept of depreciating labor is ‘illogical.’”32 The U.S. District Court for the Southern District of Alabama similarly found it reasonable for an insured to conclude that depreciation does not apply to labor “due to the inherent logical contradiction of depreciating non-depreciating things.”33

Other courts have come to the opposite conclusion, determining that it is perfectly reasonable to depreciate labor when that labor is an integral component of the value of a finished product. In Basham v. United Services Automobile Ass’n, for example, the U.S. District Court for the District of Colorado acknowledged that, in the abstract, “[o]f course labor does not depreciate; labor is a service, not an asset.”34 But “labor can increase the value of an asset, like shingles, or create a new asset, like a roof.”35 In the court’s view, it is the value of that finished product—incorporating the increased value added by labor—that is subject to depreciation.36 The South Carolina Supreme Court came to a similar conclusion in Butler v. Travelers Home & Marine Insurance Co., explaining that “the fact the labor cost is embedded [in the finished product] makes it impractical, if not impossible, to include depreciation for materials and not for labor to determine ACV of the damaged property. Rather, the value of the damaged property is reasonably calculated as a unit.”37

Other courts have focused less on the “logicality” of depreciating labor, and more on the related question of whether depreciating labor appropriately indemnifies the insured. Several courts have concluded that depreciating labor is necessary to achieve proper indemnity: failing to do so would over-indemnify the insured. Thus, the North Carolina Supreme Court held that it “makes little sense” to “differentiat[e] between labor and materials when calculating depreciation” because the “value of a house is determined by considering it as a fully assembled whole, not as the simple sum of its material components.”38 “To conclude that labor is not depreciable in this case would ‘impose liability upon the company which it did not assume,’ and provide a benefit to plaintiff for which he did not pay.”39 Inevitably, other courts have held the exact opposite.40

Decisions focusing on the state’s standard for determining ACV. Finally, some courts have resolved the question of labor’s depreciability by looking to the state’s standard for determining a property’s actual cash value. In particular, jurisdictions that apply the “broad evidence rule,” under which the fact finder is entitled to consider any evidence relevant to determining a property’s value, have tended to find that depreciating labor is not per se impermissible. In Wilcox v. State Farm Fire & Casualty Co., for instance, the Minnesota Supreme Court concluded that because Minnesota follows the broad evidence rule, whether labor can be depreciated is a question of fact for the fact finder, not a question of law for the court.41

In comparison, jurisdictions that do not follow the broad evidence rule have tended to be more reluctant to allow labor depreciation. Many states, for instance, require that actual cash value be determined by first determining the cost to repair or replace the damaged property and then depreciating that amount. Courts in these states have been readier to accept plaintiffs’ argument that an ACV payment should include the full labor costs necessary to repair the damaged property.42

Observations and Recommendations

In sum, courts are deeply split regarding the permissibility of labor depreciation. Is there anything that they should consider to help them achieve more uniform results? And is there anything that insurers can do to protect themselves from labor depreciation claims in the meantime?

Considerations for courts and litigants. In the authors’ opinion, the answer to the first question is yes. At least some of the division among courts appears to be due to conceptual confusion regarding the nature of actual cash value coverage and the claims at issue.

First, courts have all too often simply assumed that, to indemnify insureds, ACV payments must allow them to restore their property to its pre-loss condition. This, however, conflates ACV coverage with RCV coverage. Unlike RCV, ACV is designed to pay the pre-loss cash value of damaged property, not its replacement cost. In other words, ACV indemnifies insureds by returning them to their pre-loss economic condition, not their pre-loss physical condition. There is nothing inherently inconsistent between labor depreciation and this form of indemnification.

In holding that ACV should allow insureds to return their property to its pre-loss condition, courts may be trying to ameliorate the long-recognized “hardship” caused by ACV coverage—that is, it leaves insureds unable to rebuild their property without out-of-pocket expense. But that hardship simply reflects the parties’ bargain. And insureds do not need judicial intervention to avoid it; if they want replacement cost coverage, they can buy it. But requiring ACV policies to provide RCV benefits gives insureds more than they paid for.

Second, courts have been too quick to accept plaintiffs’ characterization of property value as divisible into materials and labor components. This is not a distinction found in the policies, and it is not an especially intuitive way of thinking about property value. We do not generally assess the value of a new car, for example, by breaking down the costs of the materials and the labor that went into it. A better question for courts to consider is whether the depreciation taken as a whole accurately reflects the value of the property as a whole. This is probably a task better suited to the fact finder than the court.

Considerations for insurers. Regardless of whether courts ever begin seeing eye to eye on this issue, there are easy steps that insurers can take to avoid class action risk. First, where allowed by state law, insurers should rewrite their policies to specify that depreciation will be applied to the entire value of damaged property, including embedded labor. Second, insurers should ensure that their policies contain suit limitations clauses limiting the time in which insureds may bring suit. Although not enforceable in all jurisdictions, these clauses can significantly decrease class action exposure. Finally, if they wish, insurers can follow the approach of some of their peers—simply stop depreciating labor.


The labor depreciation tidal wave looks likely to flood the legal landscape for years to come. Courts can achieve greater uniformity by paying closer attention to the manner in which ACV policies indemnify insureds: by returning them to their pre-loss economic condition, not their pre-loss physical condition. In the meantime, insurers should take what steps they can to reduce their exposure—and prepare to ride out the storm.


1. For a historical overview of property insurance in America, see Jeffrey E. Thomas & Brad M. Wilson, The Indemnity Principle: From a Financial to a Functional Paradigm, 10 J. Risk Mgmt. & Ins. 30 (2005).

2. In re State Farm Fire & Cas. Co., 872 F.3d 567, 575 (8th Cir. 2017).

3. See Thomas & Wilson, supra note 1, at 35–36.

4. See generally id. passim.

5. For a discussion of various methodologies used by courts, see 12 Steven Plitt et al., Couch on Insurance §§ 175:24–35 (2021).

6. 55 P.3d 1017 (Okla. 2002).

7. Id. at 1020.

8. Id.

9. Id. at 1021 (emphasis added).

10. Id.

11. Id.

12. Id. at 1022 (Boudreau, J., dissenting).

13. Id.

14. Id.

15. Id. at 1023.

16. Id. (Summers, J., dissenting).

17. 430 S.W.3d 675 (Ark. 2013).

18. Id. at 678–79.

19. Id. at 679.

20. See Ark. Code Ann. § 23-88-106(a)(2) (2017) (“‘Expense depreciation’ means depreciation, including but not limited to the cost of goods, materials, labor, and services necessary to replace, repair, or rebuild damaged property.”).

21. See Redcorn v. State Farm Fire & Cas. Co., 55 P.3d 1017 (Okla. 2002) (labor depreciable); Adams v. Cameron Mut. Ins. Co., 430 S.W.3d 675 (Ark. 2013) (labor not depreciable); Wilcox v. State Farm Fire & Cas. Co., 874 N.W.2d 780 (Minn. 2016) (depreciable); Henn v. Am. Fam. Mut. Ins. Co., 894 N.W.2d 179 (Neb. 2017) (depreciable); Lammert v. Auto-Owners (Mut.) Ins. Co., 572 S.W.3d 170 (Tenn. 2019) (not depreciable); Accardi v. Hartford Underwriters Ins. Co., 838 S.E.2d 454 (N.C. 2020) (depreciable); Butler v. Travelers Home & Marine Ins. Co., 858 S.E.2d 407 (S.C. 2021) (depreciable); Sproull v. State Farm Fire & Cas. Co., No. 126446, 2021 WL 4314060 (Ill. Sept. 23, 2021) (not depreciable); Mitchell v. State Farm Fire & Cas. Co., 954 F.3d 700 (5th Cir. 2020) (not depreciable under Mississippi law); Hicks v. State Farm Fire & Cas. Co., 751 F. App’x 703 (6th Cir. 2018) (not depreciable under Kentucky law); In re State Farm Fire & Cas. Co., 872 F.3d 567 (8th Cir. 2017) (depreciable under Missouri law); Graves v. Am. Fam. Mut. Ins. Co., 686 F. App’x 536 (10th Cir. 2017) (depreciable under Kansas law). Some of these courts have weighed in more than once.

22. Redcorn, 55 P.3d at 1022.

23. 281 F. Supp. 3d 785, 789 (W.D. Mo. 2017).

24. 894 N.W.2d at 190.

25. See State Farm, 872 F.3d at 574; Graves, 686 F. App’x at 540.

26. 686 F. App’x at 540.

27. 751 F. App’x 703, 709 (6th Cir. 2018) (emphasis added).

28. 953 F.3d 417, 422–23 (6th Cir. 2020).

29. Id.

30. Id. at 423 (citation omitted).

31. No. 126446, 2021 WL 4314060, at *13 (Ill. Sept. 23, 2021).

32. Shelter Mut. Ins. Co. v. Goodner, 477 S.W.3d 512, 515 (Ark. 2015) (quoting Adams v. Cameron Mut. Ins. Co., 430 S.W.3d 675, 678–79 (Ark. 2013)).

33. Arnold v. State Farm Fire & Cas. Co., 268 F. Supp. 3d 1297, 1312 (S.D. Ala. 2017).

34. No. 16-cv-03057, 2017 WL 3217768, at *3 (D. Colo. July 28, 2017).

35. Id.

36. Id. at *2.

37. 858 S.E.2d 407, 411 (S.C. 2021).

38. Accardi v. Hartford Underwriters Ins. Co., 838 S.E.2d 454, 457 (N.C. 2020).

39. Id. at 457–58 (quoting Wachovia Bank & Tr. Co. v. Westchester Fire Ins. Co., 172 S.E.2d 518, 522 (N.C. 1970)).

40. See, e.g., Adams v. Cameron Mut. Ins. Co., 430 S.W.3d 675, 679 (Ark. 2013).

41. 874 N.W.2d 780, 785 (Minn. 2016).

42. See Hicks v. State Farm Fire & Cas. Co., 751 F. App’x 703, 710 (6th Cir. 2018) (explaining that jurisdictions following the replacement-cost-minus-depreciation method have been less willing to accept labor depreciation, and collecting cases).

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Todd A. Noteboom is a partner with Stinson LLP in Minneapolis, Minnesota. He represents the financial services and insurance industries in class and other aggregated actions throughout the country.

William D. Thomson is a partner with Stinson LLP in Minneapolis, Minnesota. He assists clients in navigating the complexities of financial services and class action matters.