For policyholders seeking lower premiums or with the means to come out of pocket to cover a loss, ACV might be the way to go. However, Forbes Advisor found that the average home insurance costs increased by 8% when adding replacement cost coverage to a policy. Credit: Bigstock
Editor's note: This column is part of PropertyCasualty360's Foundations of P&C Insurance series, which aims to bring new insurance professionals up to speed, while keeping industry veterans sharp. On Fridays, PC360 will offer up fresh content covering the nitty-gritty details of P&C insurance, tips for professional development, articles looking at the industry's more niche concepts, and the history of certain lines and programs.
The purpose of insurance is to help people and organizations recover from the unexpected and to reduce the financial blow when the unexpected does occur. However, not all policies are created equal. Some might establish the value of damaged property based on its actual cash value (ACV), while other policies might settle based on the replacement cost or a predetermined amount.
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Steve Hallo
Steve Hallo is managing editor of PropertyCasualty360.com. He can be reached at [email protected]
