Loss Valuation

Question 1

Loss valuation

Answer 1

is a factor in determining the premium charged and the amount of insurance required.

Question 2

Actual cash Value

Answer 2

The actual cash value (ACV) method of valuation reinforces the principle of indemnity. CURRENT REPLACEMENT COST - DEPRECIATION = ACTUAL CASH VALUE

Question 3

Replacement cost

Answer 3

is defined as the cost to replace damage property with like kind and quality at today’s price, w/o any deduction for depreciation.

Question 4

Market Value

Answer 4

is a seldom used method of valuing a loss based upon the amount a willing buyer would pay to a willing seller for the property prior to the loss.

Question 5

Stated Value

Answer 5

Stated amount is an amount of insurance schedule in a property policy that is not subject to any coinsurance requirements in the event of a covered loss. This scheduled amount is the maximum amount the insurer will pay in the event of a loss.

Question 6

Agreed Value

Answer 6

is a property policy with a provision agreed upon by the insurer and insured as to the amount of insurance that represents a fair valuation for the property at the time the insurance is written and suspends any coinsurance or other contribution clauses in the policy. ( items whose value does not fluctuate much.

Question 7

salvage Value

Answer 7

is the estimated value an asset will realize upon its sale at the end of its useful life. Ex: car total loss but some parts might still be good to sell.