FAQs
American Advantage Insurance / SIG Insurance Agency Help Center
Why do I need to buy insurance?
To insure in the event of a claim that you have the ability to get fix and if needed your policy will defend you in a suit. You work hard for your money, why not protect the things you worked hard for.
How do I make sure I’m not over-insured?
Being over insured is rarely the case, 50% of insured are under insured or not the coverages they requested.
45% have just enough and the remaining 5% are over insured but generally not by much. Underinsured is what we see the most, or clients thinking they have Replacement Cost when its actually Actual Cash Value.
What's the difference between Actual Cash Value (ACV), Agreed Value and Replacement Cost on Property Insurance?
While this may vary slightly by company the below is a generic example of each
ACV- If you purchased your Home, Mobile Home, Rental or Commercial Property 20yrs ago and its currently insured for lets say 250,000 and the property has a total or partial loss. The Insurance Company will take 250,000 minus 20% deprecation, then minus your deductible (of lets say 2500) the total estimated pay out could be $197,500
Agreed Value - This sits in the middle of ACV and Replacement Cost. Generally this is used when someone has an older property, no mortgage but dont want ACV or pay extra for replacement cost. So lets you have a 1988 3000sqft Brick home thats Replacement Cost Value is $ 375,000 and ACV is $ 200,000 but 200K does not make you feel safe. If the company offers Agreed Value we can place that home at a number you feel better accepting in a total loss.
So you pick 280,000, in the event of a loss the company will not take depreciation off the value only the deductible.
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Replacement Cost - This is insuring your property for current rebuildable value or Mortgage value (which ever is higher). So if your home is 1988, 3000sqft your Replacement cost could be 375,000 in the event of a total loss the company will only remove the deductible from that value. How is RC coverage determined? Most homes are costing 175-225 a sqft to rebuild.