To maximize your recovery, it is vital to understand Replacement Cost Value and the rights you have regarding Replacement Cost Value. Replacement-cost coverage is a property valuation method that says your policy will pay to replace your home, business and property belongings with items of “like kind and quality” at the current prices, and except for collectible items, will replace them with “new for old.”
Replacement Cost Value coverage is a policy condition you will need to determine if it was “endorsed” onto your policy. Not all insurance companies offer Replacement Cost Value. Or, if they do, it will likely cost you a little more than Actual Cost Value (“ACV”, often called and defined as “depreciated replacement value”) policy coverage.
Payment based on the Replacement Cost Value of damaged property is usually more favorable than Actual Cost Value since it compensates you for the actual and current cost of replacing, or if reasonable repairing, the damaged property. As an example, if your television is destroyed in a flood, a replacement cost policy will pay you for the full cost of replacing it with a new television of like kind and quality.
Here are some tips to help you recover the most money with your Replacement Cost policy:
- Find your proof of purchase. Receipts are best, otherwise create a detailed description of model number, date of purchase, and other details to describe the lost item. Photos or videos of the property(both real and personal) are also very helpful as records of your property. You might also have canceled checks or charge card records, or maybe warranty information which describes the property.
- Take photos of the damaged or destroyed property. Before you discard the damaged property, take photos or video to show its/their destroyed condition.
- Get written estimates or bids before talking with the adjuster. Go shopping for the item in question. Get proof of pricing and replacement cost values.
- Prepare a List of Actual Losses. Include furniture, appliances, clothing, paintings, artifacts, food and equipment, regardless of your intent to replace the objects.
- Prepare Your Claim. Write down the itemized damages on your claim. Be sure to attach photos, contractor estimates (in very complete detail, and detailed descriptions, receipts, and proof of all of your losses.
- Try to fully recover for your damages. But, don’t believe that any settlement is final, or that any settlement is fair. It is common for insurance companies to offer settlements at the lowest range of their payout scale.
If you need additional advise or counsel to help resolve issues like this, please feel free to contact The Rector Law Firm at (719) 578-1106.