What Is Actual Cash Value?

When insurance companies determine how much a piece of property is worth in terms of providing coverage, they often don’t pay according to what the property’s full value is. In many instances, a policy may indicate that the policyholder will receive the property’s actual cash value instead of its full value. The actual cash value represents depreciation and other factors that can reduce what a piece of property is worth, lowering the insurance company’s liability.

If your insurer has wrongly abused the details of your policy to pay you too little coverage or no coverage at all, there may be legal options available for this sort of illegal behavior. To discuss how you may be eligible to pursue compensation for your missing coverage through a lawsuit, contact the hurricane insurance claims attorneys of Williams Hart today at (713) 352-0031.

How Is Actual Cash Value Determined?

Different insurers may use different methods to precisely determine how they will pay out actual cash value coverage. Generally speaking, the following procedure is followed:

  • The property’s total depreciation is subtracted from its replacement or repair costs
  • Depreciation is often determined through how much longer a piece of property may have been useful and subtracting this lost use value from the full value of the property
  • The actual cash value may be altered through special deductibles provisions as well

A policyholder should know what kind of coverage they may expect to receive before filing a claim. Not all policies will use actual cash value, and some policyholders may be entitled to full value coverage for their damages.

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The damages to your property from a hurricane may have left you with considerable financial concerns that should have been covered through your homeowner’s insurance. If your insurance company didn’t provide the coverage they should have, you may be entitled to fight for this money through a bad faith insurance claim. For a free consultation regarding your legal options as a policyholder, contact the hurricane insurance claims lawyers of Williams Hart by calling (713) 352-0031 today.

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