MANAGEMENT

Detailed explanation-1: -Under replacement-cost coverage, the insurer would pay the amount required to replace the covered item with a like-kind new one. Actual cash value is used in valuing insured property in the property and casualty insurance industry.

Detailed explanation-2: -Your insurance premium is the monthly amount that you pay to maintain coverage by an insurance company. Depending on the plan, you may have the option to pay monthly, quarterly, or annually. Some plans require you to pay up front before coverage starts.

Detailed explanation-3: -Replacement Cost Value (RCV) The amount of money needed to repair your home at today’s prices of building supplies; or replace your belongings at today’s cost of the similar or like item. It is important to discuss replacement cost with your insurance agent when purchasing your policy.

Detailed explanation-4: -The easiest way to calculate the replacement cost is to estimate the local cost per square foot to build a home by your home’s square footage. So, if your local contractors charge an average of $150 per square foot, and your home is 2, 000 square feet, the RCV for your home would be $300, 000 (150 x 2, 000 = 300, 000).

Detailed explanation-5: -Insurance coverage which pays the actual cash value (ACV) of a damaged or destroyed item pays an amount calculated by subtracting an insured property’s amount of physical depreciation from its replacement cost.