Whats the difference between replacement cost, agreed value, and other policy valuation types?
We get this question a lot. We feel this a key part of how differentiate ourselves from the competition! Here is the breakdown on the coverage types… Actual Cash Value: Actual cash value coverage (ACV) is something that you want to avoid wherever possible. This valuation clause, typically found on most homeowners and commercial property policies, subjects you to a potential for a depreciated settlement at claim time if you are insured at less than 80%, 90% or in some cases, even 100% of the replacement cost of the insured property. The typical insurance industrys definition for ACV is the: Cost to replace your instrument with a new instrument of similar like kind and quality, less depreciation. What does this mean? If you do not keep the value up to date on your instrument to 80% to 100% of replacement cost and have an ACV clause on your policy and experience a coverage loss, you may well receive less, and possibly significantly less, for the repair or replacement of your instrument.
