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I am applying for Home Insurance of a leading Pvt. General Insurance Company. In the proposal form there are two terms - Replacement cost and the Cash value are mentioned. Could the insurance gurus of the forum please help understand the meaning of above terms?
What would be the Replacement cost and the Cash value of my property?
Hi Abhishek, We are not insurance gurus. Whatever little we know we are sharing with you.
In Home insurance there are two types of cover -
1- Replacement Cost Cover
2- Cash Value Cover
Replacement cost coverage pays to replace your home and belongings with materials of "like kind and quality" at current prices.
Cash value policies reimburse the depreciated value of the item covered.
Normally a replacement cost policy will usually cost a little more.
Go always with replacement cost. You have to pay extra premium buy you will get replacement value of you asset.