How is property value calculated on a homeowner’s insurance claim?
I have an older laptop that was damaged during a hurricane. Shingles were torn off my roof and water got into my home. The fair market value is probably only about $200 – $300. However, I probably won’t be able to find the same make/model laptop. How will my insurance company (Farmers Insurance) reimburse me for my loss?
You should really ask your agent that question, but let me explain to you how it worked with a claim that I recently handled for a client.
They had replacement cost so it will depend on if you have replacement cost and the claim’s process at Farmers (I’m not too sure how they do it). So this case is just an example.
For my client, any items that became less valuable as time passed (depreciated) were paid out as follows:
What you paid for it (example, $800) minus the deprecation value (example, 40% or $320) = what the company initially pays you (example, $480). Now you go out and buy a like item…it doesn’t matter if it’s the same brand, speed, whatever, it just has to be like. So you buy any other laptop and give us the receipt. We pay you anything you paid over our initial payout ($480) up to what you paid for your original laptop ($320 extra).
So if you buy a new laptop for $300, we give you nothing extra and you just pocketed $180. If you buy a new laptop for $700, we give you an extra $220 and you come out even. If you buy a new laptop for $1200 we give you and extra $320 and you had to spend $400 out of pocket to upgrade to the new laptop.
I hope I explained that well for you, my client had trouble grasping it and thought she could somehow profit from the claim (albeit she has a few bolts loose).
Farmer’s may vary from the company I work for, but that’s how we handled it.
July 17th, 2010 at 8:35 am
If you have replacement cost coverage on your policy you would be entitle to like kind like quality brand new. Same speed and brand in other words
References :
July 17th, 2010 at 8:40 am
You should really ask your agent that question, but let me explain to you how it worked with a claim that I recently handled for a client.
They had replacement cost so it will depend on if you have replacement cost and the claim’s process at Farmers (I’m not too sure how they do it). So this case is just an example.
For my client, any items that became less valuable as time passed (depreciated) were paid out as follows:
What you paid for it (example, $800) minus the deprecation value (example, 40% or $320) = what the company initially pays you (example, $480). Now you go out and buy a like item…it doesn’t matter if it’s the same brand, speed, whatever, it just has to be like. So you buy any other laptop and give us the receipt. We pay you anything you paid over our initial payout ($480) up to what you paid for your original laptop ($320 extra).
So if you buy a new laptop for $300, we give you nothing extra and you just pocketed $180. If you buy a new laptop for $700, we give you an extra $220 and you come out even. If you buy a new laptop for $1200 we give you and extra $320 and you had to spend $400 out of pocket to upgrade to the new laptop.
I hope I explained that well for you, my client had trouble grasping it and thought she could somehow profit from the claim (albeit she has a few bolts loose).
Farmer’s may vary from the company I work for, but that’s how we handled it.
References :
Agent
July 17th, 2010 at 9:12 am
Well, it wildly depends on your homeowners policy. do you have REPLACEMENT cost coverage, or is it actual cash value? Is the laptop used in the course of BUSINESS?
YOUR AGENT should be able to give you an idea.
Normally, IF you have replacement cost, you get the depreciated value up front, and after you replace it, you get the additional amount, for like kind and quality.
References :