Legal Question in Insurance Law in California

I would need to read the policy language. But if it really says your benefits will be based on the value of the items when new, then I don't see an estoppel issue.

Estoppel arises when someone who has gained a legal advantage by taking one position later tries to take a contrary position. If you held onto your possessions through bankruptcy by claiming they were worth, say, $1,000, you would be estopped from claiming a higher present value from the insurer (unless their value had actually increased somehow in the meantime). The law is not supposed to help people get away with duplicity, and estoppel is one of its primary methods to avoid doing so.

But that doesn't seem to be what happened. You told the bankruptcy court what the items were worth at the time, and you're telling the insurer what it would cost to buy new replacements today. You were answering two different questions, and there is no reason to expect your answers to be the same. If the policy says what you told us it says, then there is nothing unjust about claiming the actual replacement value regardless of what you told the bankruptcy court. The estoppel argument sounds wrong to me.

As I said earlier, though, I would need to see your policy language before I could reach a firm conclusion. And I'd also need to see what you told the bankruptcy court. It's possible that I would agree with the insurer once I had all the facts.

Replacement value means replacement of the item with the same item - used. Unless a policy says it will replace with new items, all you get is the value as-is. Because you assigned value to the items in your BK case, the insurance company is saying you are estopped from claiming a higher value now. Personally that doesn't sound like a very good argument, but I haven't researched the issue. I'd ask your insurance company for legal authority that your BK filing is binding on you in an insurance claim. If they can't provide it, I'd be happy to talk to you about a bad faith case against your insurance company. Bear in mind, however, that unless your policy specifies replace with new, all you'll ever get is the actual used condition replacement cost of the things you lost.