When you insure an item, you typically want it covered for what you paid for it but your insurance policy will most likely insure your property under Actual cash Value (ACV) wordings or under Replacement Cost wordings. These methods will determine the value that is paid for your property in the event of a claim.
Replacement could be considered the cost of replacing, repairing, constructing or re-construction (whichever is least) the property with new property of like kind and quality without depreciation. Damaged property must be replaced to receive settlement on a Replacement Cost basis.
Actual Cash Value will be the value of your property after depreciation is applied. This means that your appliances may not be worth very much if they are 15 years old. An Actual Cash Value assessment at the time of loss would only pay you for appliances that are 15 years old and in the same condition as yours at the time of loss.
As a broker it is our professional duty to find the insurance product the fits our customer`s needs. Please feel free to contact us with any questions regarding which coverage is best for your situation. ** NOTE: The information provided in this blog is of a general nature. It may not be specific to your particular situation. We recommend you consult our office for appropriate advice **
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