How much would I receive for a claim if my property is damaged or lost?
(Actual Cash Value vs. Replacement Cost)
The amount you would receive for a claim depends on the true value of the damaged/lost item and whether you plan to replace the covered item. The following is an example of the difference between “Replacement Cost” and “Actual Cash Value”:
Replacement Cost: A necklace that you have scheduled on your insurance policy is stolen, and you choose to replace that necklace with the same necklace. Under your insurance policy, you would likely receive the “replacement cost” of the necklace (the amount of money you would need to go to the jewelry store and buy the same necklace), up to the limit specified in your insurance policy.
Actual Cash Value: If the scheduled necklace is stolen and you do not want to replace it but would just like the money from the insurance coverage, you will receive the “actual cash value.” This is the amount of money that particular necklace would currently be worth based on its age (depreciation), condition and what the current “going rate” for that necklace would be if it were being sold at the time of the claim.
This video explains the process by which we issue claims checks for damaged/lost property.