CurrentNebraska Department of InsurancePolicy N/A

Payment of Special Costs on Property Losses

Customize your policy alerts

Sign up for all Nebraska Department of Insurance policy alerts

Know when Nebraska Department of Insurance releases new policies or updates existing guidance.

Monitor payer policy activity

Receive email alerts as soon as relevant payer policies are published or updated.

Guidance governing when insurers must pay special costs (e.g., sales tax, luxury tax, surcharges) on property loss settlements in Nebraska; applies to insurance companies and affects first-party and third-party claim settlements handled under Nebraska law.

Policy Summary

PayerNebraska Department of Insurance

PolicyPayment of Special Costs on Property Losses

Policy CodePolicy N/A

Change TypeNo material changes

Effective DateOct 20, 2022

Last ReviewOct 20, 2022

Next Review DateN/A

Key ActionInsurers must pay special costs on loss settlements only if the property is replaced; payment is based on the lower of pre-loss value or replacement cost.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

4guidance rules

Oct 20, 2022issue date

CB-49previous ref

When Special Costs Must Be Paid

Special costs payment criteria

Covered when ALL of the following apply:

Insurers must pay special costs on loss settlements only if the property is replaced.

Payment of special costs must be based on the lower of the pre-loss value or the cost of the replacement property.

No special costs payment is required if the insured has not replaced the property; the insured may request reimbursement when actual replacement occurs as a supplemental payment per the policy requirements.

For stated-value policies, special costs are not owed if the actual cash value settlement amount has met the stated value shown on the declarations page.

Special costs related to sales tax are payable only when the property is subject to sales tax under Nebraska law (vehicles used for common or contract carrier purposes are exempt per NEB.REV.STAT. §77-2704.50).

Payment Basis and Referenced Charges

Taxes and surcharges referencedmixed

No codes listed

Payment basis — basis for determining amount of special costs

Payment basisInsurer must pay special costs based on the lower of the pre-loss value or the cost of the replacement property.

Condition for paymentSpecial costs are payable only if the property is replaced.

Stated-value policy exceptionSpecial costs are not owed if the actual cash value settlement has met the stated value shown on the declarations page.

Insurer Payment Conditions and Insured Reimbursement

Billing Rule

Payment condition for special costs

Insurers are required to pay special costs on loss settlements only when the property is actually replaced; payment must be calculated using the lower of the pre-loss value or the cost to replace the property.

Payment obligation arises only upon replacement of the property.
Payment basis: lower of pre-loss value or replacement cost.

Documentation Required

Reimbursement on replacement

If the insured has not replaced the property, the initial settlement need not include special costs; the insured may submit a request for reimbursement when actual replacement occurs, subject to the policy’s requirements for supplemental payments.

No special costs required in the settlement if property not replaced.
Insured may request reimbursement as a supplemental payment upon actual replacement per policy terms.

Terms and Indemnification Principle

Special costs (examples)

Examples of special costsSales tax, luxury tax, and other applicable taxes or surcharges.

Commercial vehicle sales tax noteCommercial vehicles used for common or contract carrier purposes are exempt from Nebraska sales tax under NEB.REV.STAT. §77-2704.50; special costs related to sales tax are payable only if the vehicle is subject to sales tax under Nebraska law.

Applicability to total lossesSpecial costs may apply to total losses when replacement occurs and are addressed by the guidance regardless of loss size.

Indemnification — principle and applicability

Indemnification principleThe purpose of insurance is indemnification—to restore the insured to the position before the loss—and this principle applies to both first-party and third-party claims.

Insurer obligation under guidanceThe NDOI believes insurers must pay special costs whether a first-party or third-party settlement is involved.

Payment tied to replacementInsurer obligation to pay special costs generally arises only when the property is replaced; if not replaced, the settlement need not include special costs but the insured may later request reimbursement when actual replacement occurs per policy requirements.

Policy Summary

PayerNebraska Department of Insurance

PolicyPayment of Special Costs on Property Losses

Policy CodePolicy N/A

Change TypeNo material changes

Effective DateOct 20, 2022

Last ReviewOct 20, 2022

Next Review DateN/A

Key ActionInsurers must pay special costs on loss settlements only if the property is replaced; payment is based on the lower of pre-loss value or replacement cost.

SourceLink

On This Page

OpenPayer is powered by Trek Health's payer performance platform. Trek continuously ingests, validates, and normalizes Transparency in Coverage data alongside payer policies and other commercial payer data to create a structured payer intelligence foundation. OpenPayer uses this foundation to deliver personalized search results, dynamically generated policy pages, and tailored policy monitoring based on each user's payers, specialties, billing codes, and areas of interest. The same intelligence powers broader payer performance workflows, including reimbursement benchmarking, contract evaluation, payer negotiations, and financial decision-making.

CurrentNebraska Department of InsurancePolicy N/A

Payment of Special Costs on Property Losses

Customize your policy alerts

Sign up for all Nebraska Department of Insurance policy alerts

Know when Nebraska Department of Insurance releases new policies or updates existing guidance.

Monitor payer policy activity

Receive email alerts as soon as relevant payer policies are published or updated.

Policy Summary

PayerNebraska Department of Insurance

PolicyPayment of Special Costs on Property Losses

Policy CodePolicy N/A

Change TypeNo material changes

Effective DateOct 20, 2022

Last ReviewOct 20, 2022

Next Review DateN/A

Key ActionInsurers must pay special costs on loss settlements only if the property is replaced; payment is based on the lower of pre-loss value or replacement cost.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

4guidance rules

Oct 20, 2022issue date

CB-49previous ref

When Special Costs Must Be Paid

Special costs payment criteria

Covered when ALL of the following apply:

Insurers must pay special costs on loss settlements only if the property is replaced.

Payment of special costs must be based on the lower of the pre-loss value or the cost of the replacement property.

For stated-value policies, special costs are not owed if the actual cash value settlement amount has met the stated value shown on the declarations page.

Payment Basis and Referenced Charges

Taxes and surcharges referencedmixed

No codes listed

Payment basis — basis for determining amount of special costs

Payment basisInsurer must pay special costs based on the lower of the pre-loss value or the cost of the replacement property.

Condition for paymentSpecial costs are payable only if the property is replaced.

Stated-value policy exceptionSpecial costs are not owed if the actual cash value settlement has met the stated value shown on the declarations page.

Insurer Payment Conditions and Insured Reimbursement

Billing Rule

Payment condition for special costs

Payment obligation arises only upon replacement of the property.
Payment basis: lower of pre-loss value or replacement cost.

Documentation Required

Reimbursement on replacement

No special costs required in the settlement if property not replaced.
Insured may request reimbursement as a supplemental payment upon actual replacement per policy terms.

Terms and Indemnification Principle

Special costs (examples)

Examples of special costsSales tax, luxury tax, and other applicable taxes or surcharges.

Applicability to total lossesSpecial costs may apply to total losses when replacement occurs and are addressed by the guidance regardless of loss size.

Indemnification — principle and applicability

Indemnification principleThe purpose of insurance is indemnification—to restore the insured to the position before the loss—and this principle applies to both first-party and third-party claims.

Insurer obligation under guidanceThe NDOI believes insurers must pay special costs whether a first-party or third-party settlement is involved.

Policy Summary

PayerNebraska Department of Insurance

PolicyPayment of Special Costs on Property Losses

Policy CodePolicy N/A

Change TypeNo material changes

Effective DateOct 20, 2022

Last ReviewOct 20, 2022

Next Review DateN/A

Key ActionInsurers must pay special costs on loss settlements only if the property is replaced; payment is based on the lower of pre-loss value or replacement cost.

SourceLink

On This Page