How to go about arguing for a more reasonable depreciated value from the company since I do not have a replacement clause on the policy?
UPDATED: Nov 26, 2012
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Asked November 26, 2012
My apartment was burglarized and my imac desktop computer was stolen. The insurance agency says the computer can be replaced for $1200.00 and then they depreciated it down to 464.00, since the computer was approximately 2 years old. This seems like a ridiculous depreciation to me since I checked and to replace the computer with a refrubished or used computer the going price on apple/ebay is $800.00-900.00 for the same make and model that was stolen. How do the computer program deprecate the value to over half and for well under what the computer can be replaced for even when buying a used model? How to go about arguing for a more reasonable depreciated value from the company since I do not have a replacement clause on the policy?
It is not unusual for the depreciated value of an item to be lower than the cost of replacing it with a similar or even identical version. This is because the depreciated value is the estimated book value after are and wear have been factored in, while the replacement cost is the estimated value of the product with a profit margin and other costs have been calculated. Your iMac is one example, but other examples might include your car, the furniture in your home, or even the home itself.
It is not unusual for an adjuster to excessively depreciate an item claimed on a loss. When his happens, the insurance company will pay the depreciated value, and you will have to pay the additional cost of replacement out of pocket. You are then free to contact the insurance company with receipts for the purchase and try to negotiate an additional settlement to compensate you for those costs. Whether or not you will receive more money than the original settlement offer will depend on the laws of your state of residence and the way your policy is worded. Some insurance companies will pay the difference, while others will not.
The best protection you could have would have been to purchase the replacement cost coverage to begin with. Replacement cost will pay to replace lost or damaged items with like items regardless of the cost. Instead, it would appear that you had Actual Cost value coverage, which only pays the calculated depreciated cost. Without full replacement coverage, you probably will not have any success in negotiating for a higher settlement.
You can contact you insurance company and try to reason with them, but these cases are generally well defined. If you have been with the same company for many years and have not filed an excessive number of claims, the company may be willing to negotiate to a certain extent, but you probably will not get the full amount you want. A more likely scenario would be that the insurance company informs you that the proposed settlement is satisfactory based on their statistical findings, and you will not receive more than has already been offered.
Answered November 26, 2012 by Anonymous