Changes to Missouri’s Valued Policy and Partial Loss Statutes

On July 7, 2021, Missouri Gov. Mike Parson signed into law House Bill 604, which restructures, amends, and clarifies Missouri’s Valued Policy Statute (§379.140 RSM0) and Partial Loss Statute (§379.150 RSMo.). The new version of §379.140 RSMo. appears to be effective immediately. The new version of §379.150 RSMo. expressly states that it applies to any fire insurance policy issued or renewed on or after August 28, 2021.

The new versions of these statutes make significant changes to Missouri law governing the adjustment of first party property insurance claims. Among the most significant changes are the following:

• Missouri’s Valued Policy Statute now applies to all covered perils, not just fire losses
• Missouri’s Valued Policy Statute now expressly does not apply to:
  1. any personal property that is not scheduled;
  2. any detached or appurtenant structure;
  3. any builder’s risk policy;
  4. any policy of mortgage insurance;
  5. any replacement cost coverage provided for in the policy or by endorsement;
  6. any loss that is covered by two or more policies
• The new version of the Valued Policy Statute also addresses the issue of commercial property policies which insure buildings on blanket basis. The new statute provides that the measure of damage in the event of a total loss is not the blanket limit. Rather, the settlement of the claim shall be based on the initial value assigned to the affected commercial building in the statement of values.
• Missouri’s Partial Loss Statute (§379.150 RSMo.)
  • Still applies only to fire losses.
  • The option to repair the property or to issue payment is now given to the carrier (the option was previously given to the insured under the old version of the statute).
  • If the applicable insurance policy has been determined and approved by the Director of the Missouri DCI to be at least as favorable to the insured as the standard fire insurance policy for Missouri, then the carrier shall adjust the loss in accordance with the policy form.
  • Expressly provides that carrier’s election to repair the property will not create a general contractor relationship between the carrier and the insured.

All claims professionals handling first-party property insurance claims in Missouri should review and familiarize themselves with the new versions of Missouri’s Valued Policy and Partial Loss Statutes. In our opinion, the new versions are a substantial improvement over the prior versions. The new versions provide much-needed clarification and guidance, and should be a welcome change for property claim professionals handling Missouri losses.

Please do not hesitate to contact Corey Kraushaar with any questions.