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Back You are here: Home Columns Weekly Columns Auto and Home Insurance 101 Auto & Home Insurance 101 for February 12, 2014

Auto & Home Insurance 101 for February 12, 2014

WHO DECIDES HOW MUCH MY PROPERTY IS WORTH? HOW WILL I BE PAID FOR DAMAGE TO MY PERSONAL PROPERTY?

Steve Bowman, Property & Casualty Insurance Broker

Actual Cash Value- The replacement cost minus depreciation. For example: a TV set may have  cost $500.00 new, if your 7 year old set gets damaged by fire, it might have depreciated 50% and you would be paid $250.00. Replacement Coverage- The cost of replacing an item without deducting for depreciation. So today’s cost for a TV set with similar features to the 7 year old one, damaged by fire, would determine the amount of compensation.  If it still costs $500 today, that would be the replacement coverage. We suggest a file of photos, Video or CD with invoices of your home, and keeping this with your policy in a safe place.
Replacement value should not be confused with market value. The market value is what your house would actually sell for and is generally more than replacement cost. 
This is because replacement value does not include land, which almost always does not need to be replaced. Remember, the homeowners insurance is designed to cover general personal possessions, not valuable collections, jewelry or antiques. You should check this and you may wish to have  additional coverage for valuables.
From the office of: Steve Bowman, Property & Casualty Insurance Broker, 106 K Ave. Kure Beach, NC 28449 : Phone 910-458-1164 : 800-542-2502 : Fax 910-458-7311
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