Law Offices of

 Thomas E. Maloney, Jr.

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The Adjuster's Advantage

A Newsletter Devoted to the Public Adjuster


Vol. 2,  No. 1                                                  January 19, 2012



180 day time limit to rebuild upheld


U.S. District Judge Katherine Hayden, sitting in Newark, has upheld Allstate's property insurance policy limitation of 180 days to complete repairs in order to claim a replacement cost holdback. In an opinion released on December 16, 2011, in the case of Olivia Reddick v. Allstate New Jersey Insurance Company, Civ. Action No. 11-365 (KSH), Judge Hayden granted Allstate's motion to dismiss a putative class action law suit filed by the Squitieri and Wilkofsky law firms on behalf of a homeowner challenging Allstate's policy limitation.


Allstate's policy provides that it "will make additional payment to reimburse you for cost in excess of actual cash value if you repair, rebuild or replace damaged, destroyed or stolen covered property within 180 days of the actual cash value payment." Similar language applies separately to covered personal property and wall-to-wall carpeting.


The insured commenced, but did not complete, repairs within 180 days of receipt of Allstate's ACV check. She sued for the balance of the replacement cost and attempted to assert a class action based upon Allstate's pattern and practice of shorting its insureds on replacement cost payments. Allstate countered with a motion to dismiss the entire Complaint, which the Court granted as to all counts. The Court found that Allstate's policy was clear and unambiguous, did not run afoul of New Jersey insurance law and the limitation was properly invoked. Predicated upon these conclusions, the Court made short work of dismissing attacks based upon a theory of a distinct and separate settlement agreement, fraud, breach of fiduciary duty (the Court found no such duty in this type of case), violation of the New Jersey Consumer Fraud Act, and rescission. You can obtain a copy of the opinion by going to and entering the case name.


The next step will be either a request for reconsideration or an appeal to the U. S. Court of Appeals for the Third Circuit.


In the meantime, we suggest that you advise any of your Allstate insureds to be mindful of and heed the limitation of the time within which to complete repairs/rebuilding. A more appealing case, such as where the insured is prevented from timely completing rebuilding by reason of delay occasioned by the municipality, could result in a different outcome. You, as a forewarned public adjuster, may be able, in advance, to convince Allstate's adjuster to extend the deadline in such a case. The argument would be the impossibility of completing repairs within the time limit as a result of factors beyond the control of the insured.


Meanwhile, NJPAA might wish to consider making a formal request to the Commissioner of Insurance to disapprove the use of this provision under the authority given to him pursuant to N.J.S.A. 17:36-5.22 to disapprove any provision of a policy which is unjust, unfair, inequitable, misleading or contrary to law.


In the cut-throat world of insurance sales, the market should correct this problem as Allstate's competitors could gain a clear competitive advantage by employing a different approach to replacement cost coverage and advertising their more favorable provisions compared to Allstate's practice of burying this trap and springing it on the unwary consumer.


As always, if we can be of assistance to you or your insureds in this situation, please feel free to contact us at 973-538-4100 or by email at We are here to help!



Tom Maloney

Tom Maloney


Representing the Insured in:

  • Coverage Disputes
  • Claims
  • Investigations
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Statewide coverage

Associate Member New Jersey Public Adjusters Association


AV rated Attorney Martindale-Hubbell


Admitted: All State and Federal Courts in New Jersey; Third Circuit Court of Appeals; U.S. Supreme Court


Certified by the Supreme Court Of New Jersey as a Civil Trial Attorney - 1982


Qualified Mediator by the New Jersey Supreme Court


Pro Hac Vice Admissions:NY, NH, MD, USDC-SDNY,

Second Circuit Court of Appeals


Georgetown University Columbia Law School


DISCLAIMER: This newsletter contains the personal opinions of the writer and is not intended to and does not provide legal advice in any way, shape or form; does not create an attorney-client relationship between the writer and the recipient or any other person; and is offered without charge for informational purposes only. You should consult with an attorney of your own choosing in any matter in which you seek legal advice.