Frequently Asked Questions
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FILE UPDATED TIME 16/05/2012 10:20:28 AM
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Why won’t my home, auto or business insurer reimburse me for the full cost of replacing my damaged or stolen items?
The amount of money you receive from your insurer for a covered item depends on several factors, such as:
- whether your coverage is for actual cash value or replacement value
For example, imagine that you make a claim for a stolen five-year-old computer, which you originally purchased for $2,000.
A replacement value policy would generally cover the cost of buying a brand new computer that is of similar quality to the one you lost.
However, if you have an actual cash value policy, the insurer would only reimburse you for the value of the used computer at the time of the claim, which may be much less than the original purchase price.
- the amount of your deductible
The amount you receive may also be reduced by the amount of your deductible. The deductible is the amount of your claim that you must pay before the insurer pays the rest.
For example, if you make a claim for $2,000 but you have a $500 deductible, your insurance will only reimburse you $1,500.
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