When you need to file a claim, you may be concerned about how much you’ll receive from your insurance company. There are many different considerations to determine what exactly you’ll receive for your claim. Below, are some factors that may determine your settlement amount explained:
- Replacement Cost vs. Cash Value.
Whether your policy is based on replacement or actual cash value is a major part of this calculation. Replacement cost is the amount that is necessary to replace an item. Actual Cash Value (ACV) is the amount that is necessary to replace an item, minus depreciation. This is the current value of the item. That means that replacement cost coverage will lead to a higher payout.
- Policy Limits.
Your Policy will outline a maximum amount of coverage that it will provide. This is a policy limit. If the damage or replacement cost for your home exceeds the limit, you will still only receive a payout of the maximum limit of your policy. This is why it’s important to ensure your policy limit is keeping up with inflation and the current cost of replacing your home.
- Compliance With Building Codes.
If your home requires rebuilding, and it was not previously in compliance with all building codes, you will have to rebuild up to code. This can make the rebuild more expensive. Generally, your policy will not cover those costs. If you’ve added an endorsement to your policy for this additional cost, you will be covered under that endorsement.
- Public Adjusters.
If you use the insurance adjuster provided by your insurance company, there is no cost to you, however should you choose to employ a public adjuster, expect to pay them out of your settlement amount. A public adjuster can take up to 15% of your settlement amount, reducing your payout.
- Stated Amount.
Some mobile home policies are stated amount policies. A stated amount policy has an amount that has been agreed upon when the policy was issued. This stated amount is the limit of your policy. If the cost to replace your mobile home is greater than the stated amount, you will still receive just the stated amount from your policy.
- Temporary Living Expenses.
If you have to temporarily relocate, your insurance company will provide ou with money to pay for additional living expenses, in addition to the cost of repairs or a rebuild. This includes expenses like extra transportation expenses (in excess of usual costs), eating out, rent and utility costs.