Ramyead

FACTS AND PROCEDURAL BACKGROUND

I. The Insurance Policy

Plaintiffs took out a homeowner’s insurance policy with State Farm, effective for one year from February 17, 2018. As relevant here, the policy provided that State Farm would pay the actual cash value of damaged personal property; specifically, State Farm would “pay only the cost to . . . replace” property (replacement cost) “less depreciation.” (See Cal. Ins. Code, § 2051 [defining “actual cash value” as “the amount it would cost the insured to . . . replace the thing lost . . . less a fair and reasonable deduction for physical depreciation”].)1 Additionally, the policy established that, in accordance with state law, “[n]o action shall be brought” against State Farm “unless there has been compliance with the policy provisions.

All further statutory references are to the Insurance Code unless otherwise indicated.

2 The action must be started within one year after the date of loss or damage.” (See § 2071.)

II. Plaintiffs’ Claim

On May 8, 2018, a leaking water supply line damaged plaintiffs’ property, including a sofa and ottoman in an adjacent bedroom.2 On May 10, 2018, plaintiffs’ attorneys filed a claim…