Description

"Replacement Cost" Really Isn't What You've Told Them (APPROVED 1 Hr. of General CE)

Underinsurance on the property side can be detrimental to the insured whether the “insurance-to-value” provision is applied or the coinsurance provision is applied following a loss. There is also a misunderstanding of the reality of replacement cost. Insureds understand “replacement cost” to mean something the unendorsed property policy does not do; insureds believe replacement cost is equal to reconstruction cost. The difference between the reality of “replacement cost” and the belief about replacement cost can be thousands or hundreds of thousands of dollars. The goal of this session is to explain how the property policy can be built to more closely approximate what the insured believes replacement cost is anyway.