The Difference Between Actual Cash Value and Replace Cost Value in Insurance Claims
If you are a property owner in Florida, you are no stranger to hurricanes. If your property has been damaged by a recent hurricane, you are probably wondering how much money you should expect from the insurance company. The insurance companies have discretion in determining how much to pay you for your damage, and it often is not enough.
If you are facing devastating loss and property damage from one of the recent Florida hurricanes and your insurance company is lowballing you, we can help. We have collected millions from insurance companies for clients just like you throughout Florida. At Ged Lawyers, our hurricane damage attorneys won’t rest until we obtain the maximum insurance settlement for you and your family.
What is actual cash value?
There are a few different ways an insurance company calculates how much it pays for a damage claim. Many insurance companies prefer to use the actual cash value, or the market value, of the damaged property.
Actual cash value is calculated by taking the replacement cost of the property and subtracting the property’s depreciation. The result is comparable to what the property owner should expect to receive for the property if he or she put it on the market for sale.
However, determining depreciation is largely subjective. Though there are some objective criteria that the insurance companies use, including a formula that analyzes the age of the property and its category), the adjuster’s personal impression of the property is also used to determine depreciation. If the adjuster is inexperienced or flat out wrong about the amount of depreciation, it may impact the value of the insurance claim.
To obtain insurance proceeds using actual cash value, the insured may be asked to sign a document before the check is written. The insured agrees not to dispute the amount offered in doing so.
What is replacement cost?
The replacement cost is often defined in the insurance policy. However, it is generally the cost it would take to replace the property in the same location with similar materials. Some argue that replacement cost value is a better measure of the loss because it provides the insured with the amount of money it would take to rebuild the property.
To obtain insurance proceeds using the replacement cost method, the insured may be asked to provide detailed information about the property and its contents, such as:
- Descriptions of the items, with their makes and models
- When the items were purchased
- The original purchase price of the items
- The current replacement value for the items
- Photos of the items that show their condition
- Receipts, if the insured still has them
These documents help the insurance company determine the amount of the claim.
What if the insurance company is not paying enough?
If the insurance company refuses to pay you what your property is worth, it may be necessary to file a lawsuit against the insurance company. However, with the assistance of an experienced disaster relief attorney, the value of your claim is maximized and you should obtain the full amount of compensation available under the law.
To schedule a free case review to discuss your insurance claim, call our Boca Raton firm today
The hurricane damage attorneys at GED Lawyers are tough litigators and among the most respected attorneys in the state of Florida. With several offices to serve you, we fight insurance companies and take them to court if necessary to make sure you get the money you deserve after suffering loss after a hurricane or other disaster. Out team of Florida disaster recovery lawyers are your best advocated. To schedule your free case review with our skilled attorneys, call 844-443-3529 or visit us online.