valuation clauses

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PostPosted: Tue Jan 27, 2009 9:39 am   Post subject: valuation clauses  

What are the different policy valuation clauses for property insurance?


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GLamb
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PostPosted: Tue Jan 27, 2009 1:03 pm   Post subject:   

Hi,



Often do many of us come to know of the wrong valuation that our policy bears after we have met with a significant loss. That's why we all would need to make sure that we have a clear understanding of the valuation clause.



One of the most common types of valuation could be in the form of Replacement cost.

Replacement cost is about reinstating or repairing a building with similar materials as it had been made of initially. If the original materials are no longer available it would be the insurance company's responsibility to pay for somewhat similar materials available in the current market.



Roddick

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PostPosted: Wed Jan 28, 2009 9:39 am   Post subject:   

The valuation clause of the insurance policy would determine the worth of the claim and depending upon its type you may receive the replacement cost, actual cash value or the state amount on the loss.



If the policy contains the replacement cost valuation then the insurance company would repair/replace the damaged property with the same quality item. However, the value of the item might not cross the limit stated in the plan.



Another form of valuation is the agreed amount, where the insurer pays the agreed amount between him and the insured.



Thanks,

Rupert

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Rupert W Bradson

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PostPosted: Thu Jan 29, 2009 11:33 am   Post subject:   

Hi,



Quote:
Another form of valuation is the agreed amount, where the insurer pays the agreed amount between him and the insured.




Perhaps we're forgetting the ACV (actual cash value). In order to arrive at this valuation you'd need to deduct the worth of depreciation from the total worth of replacement cost of the property or from the total cost of repair.

I'd personally feel that there could be instances wherein the reimbursements for replacing or repairing older buildings may not seem worthy at all. For such instances it would be difficult for you to have your old building reinstated to its original form.



Roddick
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PostPosted: Fri Feb 06, 2009 10:31 am   Post subject:   

In conjunction with this topic, there are valuation agencies in the market. Can they be of use here? Does these agencies offer valuation of property specific to insurance? Are they feasible?

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