The reason why everyone needs insurance is simple: to protect against the unexpected. So, if the personal property in your home was to be stolen, or catch on fire, do you know how this will affect you financially? A clear understanding of Replacement Cost Value (RCV) and Actual Cash Value (ACV) will give you a better a better idea on how this can impact you financially.
Actual Cash Value
The majority of Homeowners Insurance policies are written ACV for the personal property coverage. What does this mean for you? A television you purchased in 2010 for $5000, and it was a total loss today, your policy will pay you what the television is worth at the time of the loss. Not the amount originally spent on the television. Now, with the speed technology advances, do you think it’s still worth $5000?
Replacement Cost
With most carriers you can purchase the option to have your contents covered at RCV for a yearly fee. Buying this coverage would reverse the depreciation factored in ACV. Basically, this coverage will pay you what you originally spent on that television no matter how much time has passed.
Which one is right for you?
Although it depends on your needs, for every homeowner the replacement cost value option would always be preferable. You can go the economical route and give up some quality coverage in your policy, or you can muster up the extra dollars and be better protected. Our staff members take pride in making sure you are aware of all of your options to properly insure your possessions.
We strive to find the best coverage at a reasonable price so you don’t have to. We are a local & family owned independent insurance agency in Davie, FL, ready to give you that hands on personal experience you need & deserve. Here at CWI Underwriters we treat every customer like family, because you are! Give us a call!
