OKC Insurance Agents: Keeping you well informed
Perhaps you just recently put in a claim for a loss, but you’re unsure of how it all works. When talking to OKC insurance agents or someone else, you may have heard the two terms “actual cash value” and “replacement cost.” These two methods of calculation help OKC insurance agents to determine the amount that you will be paid for your loss. In this post we’d like to educate our customers a bit more about what those two terms can actually mean.
When OKC insurance agents talk about “actual cash value” this is what they usually mean:
Actual cash value is a type of policy that would cover your property in question for the market value at the time they were lost or stolen, not what you paid for them. Since your belongings are used, the market value means that depreciation will be considered in the calculation to determine what your insurance will pay you for your claim.
When OKC insurance agents talk about “replacement cost” this is what they usually mean:
Replacement cost is the amount it would cost to replace your destroyed, damaged or stolen items with the exact same item, or similar ones, after a loss. Using this calculation, the initial amount you paid for the item would be used. If the item you purchased is no longer available, replacement cost policies will pay you initial price of the item you bought in order to find one similar.
OKC insurance agents do not guarantee that your policies are strictly following these two definitions as your policy may have other explanations. We hope that the basic explanation of these definitions has helped someone to have a little bit of a better understand. As always, refer to your policy for the exact definition and explanation of actual cash value or replacement cost.