Homeowner insurance premiums typically carry hefty price tags, so you may decide to explore quotes with a different provider that’s offering something at a rate closer to your budget. However, following a storm, you find your home has been damaged. Upon filing a claim, however, it’s not good news: the insurer informs you that that amount you are going to receive represents your home’s depreciated value, also known as its cash value. When agreeing to the new insurance provider terms, you may have inadvertently agreed to switch from replacement cost value (RCV) to actual cash value coverage to receive a less expensive premium, if you didn’t take a close look at the fine print.
Know that plans, including home insurance, differ. There are two distinct types of programs in Florida that protect the average single-family home. One of these provides coverage of the RCV for the home while the other is Actual Cash Value coverage. The key distinction between the coverage is that Replacement Cost requires labor costs and the amount of depreciation for the house. The provision of the actual cash value will only reflect the market value of your damaged home directly before it is destroyed.
This information is provided by Miami insurance attorney Alonso & Perez, LLP. Our areas of practice include bankruptcy, insurance litigation, foreclosure defense, immigration law, and more. Call 305-676-7545 to speak with one of our attorneys or a Miami insurance settlement lawyer and receive a free consultation We look forward to working with you.
This information is provided for educational or informational purposes only and should not be construed as legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice.