Joe, my small business recently suffered a decent sized fire after a small explosion and I feel that the insurance company was not giving me enough to cover the claim to rebuild, and I am furious! I had to come out of pocket with almost a 1/3 of the repairs to just get back in business and still have more to do.
My insurance company told me that I have only an ACV policy and not an RCV policy. I have been with this insurance company for 30 years and I recently changed my coverage and they won’t honor my 30 years. Smoke started coming out of my ears when I heard this, what could I have done different with the insurance company to have had this go a little more smoothly?
Harper Woods, MI
Wow, this problem is as common as catching a cold and has become an epidemic in the business insurance world!!
If it makes you feel any better… you are not alone. Coverage issues after an insurance loss have become increasingly common place. And, believe it or not, it may be the insured and not the insurance company that’s to blame!
I am going to go out on a limb here and make an assumption. A lot of business owners and homeowners, in an effort to save money, are “shopping” their insurance policies looking for the best deal.
Shopping for better deals on clothes, food, housewares and a bunch of other things, is sensible for many people. Frankly, I do it all the time. Getting quality brands at discount prices is smart. Shopping for great deals with insurance companies doesn’t work that way. Let me say it more simply… If you pay less, you get less. An ACV (actual cash value) policy looks appealing when you are trying to save money, particularly if you no longer carry a mortgage. An RCV (replacement cost value) policy will cost you more up front, but will typically cover the cost to replace your home or business in today’s dollar value, not just your cash value. Sound confusing? No worries, you are normal. Insurance policies can be very confusing and restrictive. Becoming a good student of your policies and coverage (preferably BEFORE you need them) is critical. All is not lost! At this point, you have enough information to go back to your insurance agent and get all the answers you need.
Sorry this happened Steve, but you are asking the right questions now, so you will be prepared later. Then, make sure you hire a restoration contractor you can trust. They will assist you throughout the process and make sure you get enough out of your claim to get the job done!
And remember at “Ask Joe, he will know!", there is never a “DUMB” question, but always a “SMART” answer!
Joseph P. Cipriano Jr.