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 Posted: Wed Jun 18, 2008 6:05 pm Post subject: which one is more common |
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More often than not, you should have repair/replacement cost on your property.
Actual cash value can sometime be less than what it is really worth. The best way to think about it is this.
You may have a house that is worth 200,000 dollars. Well, if it burns down and you have cash value, they will cut you a check for 200,000.
Say you want to repair or replace it. Well it could end up costing more than the home is worth. You'd have to clean up the whole thing, tear it down, buy all the materials (wood, pipes, wires) hire contractors, etc and so fourth, and it may cost more for that then the cash value.
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jonathan87
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| Posted: Thu Jun 19, 2008 4:05 am Post subject: |
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| I see very few property policies that are ACV. I'd say more are RCV. |
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tcope
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| Posted: Wed Jun 25, 2008 6:21 am Post subject: |
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consumers prefer to buy replacement cost policies as it gives them better chances to re-build their damaged dwellings . However, at the same time its costlier than the actual cash value policy, which only pays the policy holder the market value of the damaged property.
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the_phoenix
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| Posted: Wed Jun 25, 2008 6:58 am Post subject: |
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There are two different forms of replacement cost policies available in the market, guaranteed cost policy and extended cost policy.
The guaranteed replacement cost policy guarantees to bear all the necessary costs involved in reconstructing the house, and hence, is costliest in nature.
The extended replacement cost policy promises to pay a certain percentage (ranging between 20% and 25%) over the policy limit for reconstruction purpose.
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edmund Kriesler
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