Want an explanation for Insurance Policy for contents ACV verses Replacement
Sharon
ssweany06@embarqmail.com
Total Comments: 2
Posted: Sat May 08, 2010 05:23 am Post Subject:
Replacement cost is cost to replace item with new. ACV is actual cash value or replacement cost less depreciation.
Posted: Wed May 26, 2010 03:34 pm Post Subject:
Just wanted to elaborate on tcope’s answer. Replacement cost pays to replace the item, without regard to the actual value of the item. In other words, if you owned a 10 year old television set, it is worth quite a bit less than a new television set, even if the new television set is of like kind and quality of the older one. If you had replacement cost coverage, the insurance company would pay for you to buy a new television set. Let’s look at this on a larger scale. A 10-year old kitchen is worth quite a bit less than a new kitchen. Yet, if a fire destroys the kitchen, you will have to put a new kitchen in. So if you carried ACV (actual cash value) on your house insurance, you would only get paid the value of a 10-year old kitchen. You could end up having to cough up the difference out of our pocket.
Posted: Sat May 08, 2010 05:23 am Post Subject:
Replacement cost is cost to replace item with new. ACV is actual cash value or replacement cost less depreciation.
Posted: Wed May 26, 2010 03:34 pm Post Subject:
Just wanted to elaborate on tcope’s answer. Replacement cost pays to replace the item, without regard to the actual value of the item. In other words, if you owned a 10 year old television set, it is worth quite a bit less than a new television set, even if the new television set is of like kind and quality of the older one. If you had replacement cost coverage, the insurance company would pay for you to buy a new television set. Let’s look at this on a larger scale. A 10-year old kitchen is worth quite a bit less than a new kitchen. Yet, if a fire destroys the kitchen, you will have to put a new kitchen in. So if you carried ACV (actual cash value) on your house insurance, you would only get paid the value of a 10-year old kitchen. You could end up having to cough up the difference out of our pocket.
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