You got your insurance policy so you would have enough money to replace everything you own in the event of property damage from a Florida natural disaster or other tragedy. Yet now that you have filed your claim, the insurance company is not offering you as much money as you thought you would get. Why?

Insurers are notorious for underpaying claims to protect their profits. They use multiple methods to lower the settlement amount you receive. One of these is how they determine the value of the property loss.

Depreciation affects value

One of the biggest reasons for the lower amount than you anticipated is depreciation. Your valuables are no longer worth as much as they were when you first got your policy, often due to wear and tear or advances in technology. This fact usually affects electronics, vehicles and the exterior of buildings the most. Your insurer will base reimbursement on how much it costs to replace your belongings today at actual cash value. 

However, not everything loses worth over time or undergoes the same amount of depreciation. Insurers use their own formulas to determine ACV, which undoubtedly will work in their favor and not match your numbers. If you have a replacement cost policy, then depreciation does not apply, and you should get a replacement item of similar type and quality.

Valuation can offer a solution

When you and the insurance company disagree over the monetary amount you should receive, you can resolve the issue through a third-party valuation. This entails each of you hiring an independent appraiser to review the damage. If the valuations are different, a neutral party such as a mediator will make a final decision.

Other tips for higher compensation

If you make immediate repairs or replacements, keep all your receipts as proof in order to receive the full value back from your insurance provider. It is also wise to keep evidence of damage, such as photos, to boost your case.

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