Timeline for Why buy insurance?
Current License: CC BY-SA 3.0
7 events
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| Dec 7, 2015 at 16:33 | comment | added | david | It certainly is possible to buy insurance that provides enough to buy a reasonably comparable replacement for the item. I live in a home I bought for about $55,000; in a total loss the policy would pay out $208,000 (plus coverage of personal property, etc.), and there are bigger new homes for sale nearby for less than that. A few years ago I had a car accident, "total loss", the payout wasn't enough to buy a new car, but it was enough to buy a used van with lower mileage for cash. | |
| Oct 16, 2015 at 4:49 | comment | added | unknownprotocol | Replacement Cost - ActualCashValue = Depreciation. Generally speaking, in RC policies you get to have your house rebuilt/replaced. Up to the limit of the policy, which of course, should always be enough to cover the dwelling. Not sure how it is in the UK, but in the US, there's also a limit in the Loss of Use (aka Addtnl Living Exp.) and if you reach the limit, then yeah that's it. | |
| Oct 13, 2015 at 3:22 | comment | added | Five Bagger | As for putting you up in a hotel, the so-called "additional living expenses" allowance, they get to choose the flea bag hotel. Also, such clauses in real policies usually have both dollar caps and duration caps that are wy below what you will actually need. One industry guideline is that hotel stays should not last past 30 days. Well, guess how long it takes to build a house? a YEAR or longer. You think they are going to pay for you to stay at the HIlton for a year? Dream on. | |
| Oct 13, 2015 at 3:12 | comment | added | Five Bagger | "Replacement cost" policies are complete scams. What happens is that the insurance company says: "According to our computer estimates it will cost XXX pounds to rebuild your house. Here's a check." Then you go to an actual builder and he will quote you double or triple the amount on the check to actually do it. | |
| Oct 13, 2015 at 3:10 | comment | added | Five Bagger | @gnasher729 LOL, if you believe that you are completely gullible. Do you know how much it costs to build houses in the UK? A freakin fortune. You think an insurance company is going to pay to rebuild your house the way it is? Dream on, buddy. To build a decent house in the UK now costs about 1000 pounds per sq meter easy + 10k pounds in fees or about 200,000 pounds for a typical 185 square meter 2-storey house. Trying getting 200k pounds insurance and see how much the annual payment is and compare to whatever you are paying and you will start to see reality. | |
| Oct 13, 2015 at 0:20 | comment | added | gnasher729 | Where I live (United Kingdom), my home insurance will rebuild my home as it was, and put me up in a hotel for the time, with no cost to me. Interestingly, if you have damage caused by an item in your house that breaks, the one thing they will absolutely not pay for is the broken item itself (I had to pay for the £10 item in the bathroom that broke while the insurance paid several thousand pound in water damage). | |
| Oct 12, 2015 at 21:32 | history | answered | Five Bagger | CC BY-SA 3.0 |