The terms, actual cash value and recoverable cash value, are something you’d come across when buying an insurance policy and filing a claim after an unfortunate incident. Therefore, it is essential to be familiar with the policy document and the type of replacement costs that will be paid out in the event of a loss.
It is worth hiring a public adjuster to help you understand the intricacies of your insurance document and assist in filing a claim that leads to a fair and equitable settlement. For example, when talking about actual and recoverable cash value, insurers use these methods to calculate the amount of compensation. Let’s look at this in further detail below.
What is Actual Cash Value?
Actual cash value is the fair market value of the property. It takes into account relevant depreciation, property value changes, upgrades, renovations, or changes you’ve made to improve the property. If you take out an ACV policy, you must remember that you wouldn’t be paid the total value of the property in the event of a loss due to the depreciation factor.
Depending on the type and extent of the loss, you can be expected to pay some of the rebuilding expenses. Actual cash value policies cost less than recoverable cash value ones. ACV policies can be a viable option depending on your unique needs and requirements.
Recoverable Cash Value
If you take out a replacement or recoverable cash value policy, you can expect the insurer to pay out the entire costs to replace or repair the property instead of a significant portion, like the ACV. These policies are generally more expensive. Replacement costs generally exceed ACV but wouldn’t exceed your insurance policy’s prescribed limit.
It can be hard to determine which policy is right for your requirements because both of them have their pros and cons. Therefore, you need a robust understanding of your expectations and a qualified policy adviser who can recommend the right policy according to your needs. RCV policies can be a great way to cover depreciation costs, but they are more expensive, and failure to pay the premium can result in a policy lapse or even cancellations.
Get Started with Morgan Elite Specialist Services
No matter what type of policy you hold, working with a public adjuster who can help you evaluate damages and file a prompt and accurate claim with the insurer after a significant loss is important. However, finding a reliable, experienced, and knowledgeable adjuster is easier said than done.
If you’re looking for experienced public adjusting services in Texas, check out the services at Morgan Elite Specialist Services. With over 75 years of combined experience, we can help you with all your insurance claim needs. In addition, we provide comprehensive services that include insurance appraisals, damage documentation and evaluation, claims filing, etc.
Visit their website for more information on Mass Tort Settlement, forensic accounting services, claims handling services or contact them today.
