FREQUENTLY ASKED QUESTIONS
Listed below are some common questions we receive from our clients. Hopefully you will find an answer that will help you with your needs. If you need more informaiton, just e-mail us and we'll be glad to assist you!
- What is coinsurance?
- Coinsurance is a penalty imposed on the insured by the insurance company for insuring the value of property. The penalty is based on a percentage stated within the policy and the amount under reported. As an example:
A building actually valued at $100,000 has an 80% coinsurance clause but is only insured for $75,000. Since its insured value is less than 80% of its actual value, when it suffers a loss, the insurance payout will be subject to a penalty less any deductible.
- Coinsurance is a penalty imposed on the insured by the insurance company for insuring the value of property. The penalty is based on a percentage stated within the policy and the amount under reported. As an example:
- What is agreed value?
- In property insurance, the term “agreed amount” is an agreement between you and the company that suspends the coinsurance penalty clause.
- Actual Cash Value vs. Replacement Cost
- Payment based on the replacement cost of damaged or stolen property is usually the most favorable figure from your point of view, because it compensates you for the actual cost of the property lost. For example, if your camera is stolen, a replacement cost policy will reimburse you the full cost of replacing it with a new camera of like kind. The company will not take into consideration any wear and tear to the camera.
On the other hand, actual cash value is the standard which all insurance companies prefer when reimbursing you for your claim. Actual cash value is equal to replacement cost minus any depreciation. In other words, it represents the dollar amount you could expect to receive for an item sold in the marketplace.
- Payment based on the replacement cost of damaged or stolen property is usually the most favorable figure from your point of view, because it compensates you for the actual cost of the property lost. For example, if your camera is stolen, a replacement cost policy will reimburse you the full cost of replacing it with a new camera of like kind. The company will not take into consideration any wear and tear to the camera.
- Are there different types of homeowner policies?
- Yes. If you own your own home, you need a different policy from someone who owns a condominium or rents. The types of policies are: homeowners, condominium owners, renter’s, and high-valued homeowners.
