Categories: Insurance

What to Know About Insurance Valuation Disputes

When you have a home, you imagine living in it forever. You renovate it so the home suits your present and future lifestyle. In time, you purchase things to increase the enjoyment of your home as well as acquire new things of value that you will later give to your beneficiaries.

However, it can take one disaster to lose everything. Natural disasters such as devastating storms can cause flooding in your home and water damage to your possessions. A campfire that wasn’t doused could cause a wildfire that damages your home. While it is a horrible experience to lose possessions or even your home, you have the peace of mind that your insurance policy will cover the costs of the damage and help replace your items.

Understanding Loss Valuation

Loss valuation involves the insurance company determining an amount that will be given to the insured if they experience partial or total damage to property or vehicles. The valuation helps insurers decide on the right amount based on policy limits. An insurance company may provide an amount that will cover the replacement of the vehicle or will provide compensation so that you can make repairs to bring the property back to a previous state before the damage occurred.

Types of Valuation

There are several different types of insurance valuations that may be found in your policy based on the property or possession that is being insured. Types of valuations may involve the following:

  • Repair or replacement costs: the determined insurance compensation amount will be based on the repairs and replacement costs that will be incurred to bring the property back to its original state before the damage or accident occurred
  • Pre-loss cash value: an amount that covers the original value of the property regardless of any depreciation
  • Stated insurance amount: an established amount that the insurance company has created and listed in the policy
  • Fair market value: a value amount that both the insurance company and the insurer agree to for the property or possession

Insurance Valuation Disputes

Insurance companies will perform assessments to determine the value of your home, car and other possessions covered by the insurance policy. You can then pay insurance premiums while knowing that if an unfortunate occurs,, the insurance company will pay you for the stated insured amount. However, oftentimes, insurance compensation that is paid out to you may differ greatly from what you have insured.

This problem often occurs for items that depreciate quickly, such as cars and other vehicles, or for possessions you have in your home. While you believe that an item that was destroyed in your home should be entirely compensated, the insurance policy has limitations for certain objects even though person’s home or vehicle is insured for the full amount on the policy.

When it comes to real estate property, a home can appreciate in value based on the items that you purchase for it after you have signed the insurance policy. You may have an old insurance policy with a lower coverage amount from the time when you purchased the house.

Many insurance disputes also occur when the insurance company places their own amount to the possessions that you own without coming to an agreement with you. Without getting additional insurance and coming to an agreement previously with the insurance company to establish the fair market value for your possessions, you may find yourself getting less than what you expected.

Understanding Your Insurance Policy and Your Rights

One of the best things you can do is continually review the details of your insurance policy and what it will cover. You should ask questions about whether certain items are covered and how much you will receive if the item is damaged during an accident. You should also gain clarification on certain coverage options and obtain special additional coverage if what is offered is not enough. If you are going through insurance valuation disputes, there may be a condition in the insurance policy where the insurance company has to provide a loss appraisal, which is normally reserved for instances when there has been damage caused by a fire.

If you are dealing with insurance valuation disputes, you need to understand your rights so you can receive fair compensation to replace or repair your property or possessions in case of loss. The litigation lawyers at Mclarty Wolf can provide you with a free telephone consultation to review your case. We can offer you legal advice and representation so you can make the best decisions to obtain the insurance compensation you need to cover the possessions and property that was damaged. Contact our office today to set up an appointment.

Mclarty Wolf

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