Saginaw Michigan Homeowners Insurance - Maury Davis, Certified Insurance Counselor, (989)220-6157, Saginaw, Michigan, Vice President, Future Insurance Agency.
On a Saginaw Michigan Homeowners Insurance, the difference between Replacement Cost Coverage and Actual Cash Value (ACV) loss settlement language found in Saginaw Michigan Homeowners Insurance is very great. If you have a loss to your home the difference could be financially catastrophic to you if you have the wrong coverage.
Replacement Cost Coverage on a Saginaw Michigan Homeowners Insurance policy pays for the repair or replacement of your home due to a covered loss, without depreciation, up to the limit of the policy. (Optional Extended, and Guaranteed R.C. Endorsements increase this amount)
ACV or Market value Saginaw Michigan Homeowners Insurance policies pay for the repair or total loss, MINUS DEPRECIATION.
If you have an ACV policy, this leaves a balance, that YOU PAY, to the contractor doing the repair. That’s a lot of money for the average person. And for a relatively small average difference in the Saginaw Michigan Homeowners Insurance premium between a Replacement Cost policy and an ACV policy. If you saved $300 in premium, you did not make a very good bargain.
With a Replacement Cost policy, all you pay is the deductible. In this example you would pay only $500.00. The Saginaw Michigan Homeowners Insurance company would pay $119,000 to the repair contractor on your behalf.
Now there are endorsements available on ACV Saginaw Michigan Homeowners Insurance policies to make Repairs on partial losses not depreciated. This is called a Repair Cost Endorsement. But total losses would be subject to the same kind of depreciation that I described above. The last 4 claims that we had at my agency, 3 were partial losses and ran around the $140,000 each. This is because of all the smoke, and water damage that comes with a fire. All of my insureds had Replacement cost policies. The losses were paid in full minus the deductibles. NO DEPRECIATION.
If your home is on an ACV policy, you will have a much lower dollar limit of coverage on your home. For example your home might have an insured market value of $80,000 but cost $180,00 to build brand new. This is a real world representation. In the partial losses that my clients suffered, the payout would have been: $140,000 - $500 deductible = $139,500 balance - $80,000 ACV coverage limit = $59,500 underinsured.
So the Saginaw Michigan Homeowners Insurance company writes a check for $80,000 on your behalf to the repair contractor and YOU PAY $59,000 to the repair contractor. The loss was not depreciated, but the policy limit was exhausted. Also a real world example. A Replacement Cost policy would have had $180,000 limit and paid the entire loss minus the deductible.
PURCHASE A REPLACEMENT COST POLICY ON YOUR HOME! Do not buy anything less.