I had a fire damage what do I need to know about if I’m properly covered?

11/3/2021 (Permalink)

A soot cleaning demonstration.

A fire damage is often on of the most expensive services for an insurance claim. “Unfortunately, a ValuePenguin survey found that 47% of homeowners are unsure of what their insurance covers. J.D. Power similarly found that 52% of homeowners don't have a complete understanding of their coverage.” According to ValuePenguin.com. If your policy is not adequate you may have out of pocket cost.

RCV vs ACV, what does it mean? The below information was according to Progressive.

Th replacement cost is the price of replacing property or a belonging. The actual cash value is the current value (with depreciation). You bought a couch for $3,000 five years ago, and now it’s worth $1,500. If it’s damaged in a claim, here’s what you’ll get:

ACV - You’ll get $1,500 because that is your couch’s actual value after five years of depreciation.

RCV- You’ll get the value of a brand-new couch (similar model), which could be more or less than what you originally paid.

Code Upgrade: When your home was built 20 years ago the code standards are different then they are now. Most commonly for the areas changed or worked in will need to be brought todays standards. Some policies will have a percentage of insured home as a code upgrade of a fixed amount.

Total Coverage and Deductible: Some homeowners will make the mistake to insure the home for the least amount possible when buying a home. For instance, some homeowner by the home for $130,000 so they insure it for $160,000 dwelling(building) and $20,000 personal contents. This will often not be adequate as the cost to demo may be $20,000 + $180,000 to build it to todays standards with todays material prices of lumber. Therefor your purchase price of the home is not the price to insure your home for. Your deductible should also be an amount you can pay for when you least expect it.