If you’ve ever been overwhelmed by your insurance options, you’re not alone. In fact, you might have had so many choices at your fingertips that you neglected to carefully ferret out the details of each of them before selecting one. Regardless of whether you’re in that position and are now seeking to file a claim or you’re about to settle on a type of insurance that is right for you, you should take the time to recognize some of the major differences between certain policy types because even seemingly small differences can have major consequences.
As an example, let’s look at the differences between replacement and repair insurance.
Replacement Cost Insurance
As its name implies, this type of insurance allows you to file a claim to recover money for the cost to replace the property that is damaged or destroyed. One of the most important things to note here is that the exact amount of replacement cost received to replace an item can depend on a lot of factors, such as the market of the asset in question and whether the asset has depreciated over time.
So, what at first might seem like an easy calculation to make can actually become quite complicated. This can lead to disputes with insurance companies. It’s also worth noting that this type of insurance can be quite expensive, too.
Repair Cost Insurance
This type of insurance allows you to file a claim to simply repair the asset in question. Repairs are generally a little easier to calculate cost-wise, which means that you might have an easier time with your insurance claim. However, a repair claim might only get your asset back to a minimal level of acceptability that doesn’t suit your needs. Therefore, you need to carefully consider each insurance option in order to settle on the one that is right for you.
Dealing with insurance companies can be a nightmare, especially when filing claims like those based on the types of insurance discussed above. The good news is that you don’t have to deal with them by yourself. Instead, a legal team that is dedicated to insurance disputes can provide you with some guidance so that you can hopefully resolve your issues in your favor.