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Insurance Coverage Awareness for Homeowners : Part 2 
In the event of a loss, who will pay me for the value of what has been lost?
Click Here to see Part 1

This writing continues our series on insurance awareness for homeowners.
Our last blog, part 1, produced an awareness of the property limits
at the correct dollar level.  Please take time to read Part 1 if you missed it last week. 

Today we will look at in the event of a loss, who will pay me for the value of what has been lost?

1.) Note whether the dollar limits on your homeowner policy are RCV (Replacement Cost Value) or ACV (Actual Cost Value). If they are RCV, it means that if you have a loss, you will be paid for what it costs to replace the damaged item to the condition it was in before the loss. In a partial loss situation, in both site built and manufactured homes it usually requires that they tear out the damaged material and replace it with new material. However, in the event of a total loss, site built homes are replaced with new materials while manufactured homes are replaced using RCV, but meaning like kind and value. What this means is, they could replace your manufactured home with another of comparable age and quality in the event of a total loss. Why is it done this way? It is because Insurance Laws state that insureds must be brought back to the approximate condition they were in before the loss occurred. What has to be done for a site built home, to restore it, is an entirely different matter than it is for a manufactured home where another manufactured home of like kind and value can be placed on the property.
2.) ACV (Actual Cost Value) is based on using RCV (Replacement Cost Value) and then subtracting the depreciation on the property. The percentage amount of depreciation used is based on the age and condition of the property.

Stop in and talk to our professionals to get more information on cost values and how it applies to your policy.

Did this insurance tip help you? Please leave your comments below. 


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