Are You Properly Insured? Actual Cash Value (ACV) and Replacement Cost Insurance
Last week I was asked by a claimant to assist her and her family through a fire that damaged their home and a large portion of their personal property. Once I was able to get a copy of their homeowner’s insurance policy a was shocked to find that even though they had a properly valued home for insurance purposes, they only had an “ACV only” on the dwelling. ACV means Actual Cash Value. ACV is figured by determining the replacement cost less deprecation. The home was built just after WW2. It appeared recently remodeled, but the structure was over 60 years old and depreciation will affect and limit the ultimate reimbursement they can receive regardless of what I do.
Have you read your insurance policy lately?
My strongest admonition to all owners and renters is to get replacement cost insurance from a reputable company. Without that endorsement, you could be facing rebuilding from a fire or other catastrophic loss with only 50 percent or less of the value of the loss in monies to assist you – even if it was a total loss.
If you’re unsure what provisions are contained in your policy, send it to us for a free evaluation either be mail, fax or email.