With things starting to settle down from all the storms last year, insurance rates and coverage are changing accordingly. What does this mean for everyone? First thing: you should know the difference between Actual Cash Value and Replacement Cost because most companies are changing how they cover roofs.
Let’s take a T.V., that’s simple enough. Say you have a $1,000 High Definition flat screen T.V. that got stolen. If your policy has an Actual Cash Value loss settlement, this would mean that you would get back: the cost of the T.V. when bought minus the depreciation minus your deductible, which could mean you are only getting something like $200 back. (And mind you, I am just pulling numbers from a hat here.)
Take that same T.V. which you bought a few years back cost you $1,000, now it costs $500. With Replacement Cost loss settlement, you would get the $500 minus your deductible. Now, this example is just the T.V., what about the other belongings that got stolen or if during a recent storm your roof has hail damage. It is important to know your coverages in case something happens.
Second thing to know is some insurance companies are changing to a minimum $1,000 deductible. This seems like a high number, especially when some people are used to a $500 deductible. However, this change should help your premiums to either remain the same or even decrease. Always check your policy and talk with your agent if you have any questions.
If you want to read more about this check out this article.