What’s the difference between Replacement Cost and Actual Cash Value?

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When it comes to property insurance, you’ve got a lot of choices to make.

One of the most important choices you may have to make that very few insurance buyers understand: actual cash value and replacement cost.

Here, I’ll explain the difference between replacement cost and actual cash value.

Replacement Cost means the cost to replace the property on the same premises with other property of comparable material and quality used for the same purpose.

Actual Cash Value is the cost to replace with new property of like kind and quality, less depreciation.

So What’s the Difference?

Both valuations are based on the cost today to replace the damaged property with the new property.  The only difference between replacement cost and actual cash value is a deduction for depreciation.

Your dwelling and most of its contents – such as your roof, laptop, and furniture – may lose value over time due to factors such as age and wear and tear. This loss in value is commonly known as depreciation.

So Which is Best for You?

For the majority of homeowners, a replacement cost policy will be best. You want to know for sure that you could rebuild your home should the worst happen. 

We’re here to help. Talk to us today about your home and how you may want to insure it.

The Most Important Coverage on Your Motorcycle Insurance Policy

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On a bike, it’s easy to feel free. Invincible, even. But many auto or truck drivers don’t turn to take that extra look. They don’t watch out for anything smaller than their own vehicle. They look for big things.

That’s how Dave got hit. Got swept right out of his lane by a pickup truck, whose driver was too preoccupied texting while passing another car. Luckily, Dave survived… barely. His leg didn’t. The guy who hit him didn’t have insurance. Dave did. And his insurance helped take care of the medical bills, physical therapy, and the months he was without a paycheck.

Dave’s accident taught you a lesson. You’ve vowed to become more cycle-smart and get your stuff in order before you take off again. Get motorcycle insurance.

As you shop for your Motorcycle Insurance policy, keep in mind that cheaper isn’t always better when it comes to insurance.  And you want a policy that protects you when you need it. Cheap coverage usually provides you only with low liability limits, and, what’s worse, with the most important coverage completely missing:

Here at Joyce, Jackman & Bell Insurors, we have reviewed countless policies that did not include Uninsured & Underinsured Motorist (UM/UIM) coverage. Yet, this is probably the single most important part of a motorcycle policy. UM/UIM is the coverage that paid for Dave in the example above. Without it, he would have gotten nothing.

Not having UM/UIM coverage can hurt you quite badly. Here’s why:

As a biker, your risk of being at-fault in an accident is comparatively low. But, your risk of getting hit is relatively high. That’s where your UM/UIM coverage applies.

Your Uninsured & Underinsured Motorists coverage kicks in if you are hit by a driver who doesn’t have the insurance or resources to pay for your injuries, medical payments, loss of wages, and damage to your bike. If the person who hit you doesn’t have the money to pay for the damages they caused you, your own insurance will protect you. But only if you have the right insurance. This is what your UM/UIM coverage does for you.

You cannot buy stand-alone UM/UIM coverage. Uninsured & Underinsured Motorists coverage can only be obtained in combination with liability coverage, and it can only be purchased up to the limits of your liability coverage. You cannot carry low liability limits, but high UM/UIM limits.

Now, don’t get us wrong: We are not saying that liability coverage is not necessary for bikers. Actually, it is very important to have adequate liability limits to protect yourself and your assets if you are at fault in an accident and cause damage to another party.

To sum it all up: You want Motorcycle Insurance so you can protect yourself! Whether that is a liability lawsuit or an irresponsible driver who hit you.

Motorcycle Insurance will help protect you, your bike, as well as your assets in case you ever find yourself in a liability lawsuit. Joyce, Jackman & Bell Insurors can help you protect almost any type of motorcycle, whether it’s a Dirt Bike or a Street Cruiser, a Vintage bike, or a customized high-performance machine.

Protecting Your Business During COVID-19

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As a business owner, we know you have concerns about running your business in the wake of COVID-19. We encourage you to follow CDC guidelines for protecting your business and the health and safety of your employees.

Plan, Prepare and Respond to Coronavirus Disease 2019

The CDC interim guidance may help prevent workplace exposure to acute respiratory illnesses, including COVID-19, in non-healthcare settings. The guidance also provides planning considerations if there are more widespread, community outbreaks of COVID-19.

  • Actively encourage sick employees to stay home.
  • Separate sick employees who do come to work or become sick during the day.
  • Emphasize staying home when sick, respiratory etiquette and hand hygiene by all employees.
  • Perform routine environmental cleaning.
  • Advise employees before traveling to check themselves for symptoms of acute respiratory illness before starting travel and notify their supervisor and stay home if they are sick.
  • Employees who are well but who have a sick family member at home with COVID-19 should notify their supervisor and refer to CDC guidance for how to conduct a risk assessment of their potential exposure.

Read more on the CDC guidance here. Continue reading →

Homeowners Insurance and Your Valuable Items

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Valentine’s Day is upon us. Are you going to give her those diamond earrings she’s been dreaming about? Is he receiving a Rolex? It’s a perfect time to post about homeowners insurance and your valuable items. High-value items are insured under your homeowners policy as part of the personal property coverage, BUT only to certain limits. Maybe $1000 or $1500.

Jewelry is by far the most common high-value item to be insured. Did you know you can insure all your expensive items such as furs, silverware, coins, and fine art with a Valuable Items endorsement or an Inland Marine policy?

Coverage for valuable items is available at a surprisingly low cost. And if you have a loss, it’s not subject to the homeowner deductible.

I’d also like to add that if you and your significant other don’t live together, the insurance question can become a little more complicated. As long as the item is still in your possession, you can insure it on your homeowners or renters policy. But as soon as you give it to your loved one – it becomes theirs and must be insured on their homeowners or renters policy. When in doubt, call your agent.

5 Rules Every Landlord Should Live By

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I’m pretty confident that if you asked anyone who has ever owned a rental property you would get an overwhelming response that it’s not as lucrative or easy as they thought it would be. In fact, owning a rental property can be a major pain, and end up costing you a ton of money!

I certainly don’t mean to be a “Debbie Downer”, and I know that if it’s done right it can be lucrative, but from an insurance agent’s perspective, I don’t see a lot of people doing it right.

So you’re probably thinking, “Well Chris, you are an insurance agent. What do you know about real estate or rental properties? Why should I take advice from you?”

I’m not a real estate agent, and I don’t own a rental property. However, several of my friends/family/clients/co-workers own rentals, and because I insure a bunch of their properties, I’ve had a first hand account of the process, and I’ve learned what to do, and what not to do.

Continue reading →

Will my credit rating change my insurance rates?

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I was recently asked this question by one of our Joyce, Jackman & Bell Insurors clients, and thought I would share the answer here for our readers.

There are a lot of things that go into homeowners and auto insurance rates, one of them being credit. I’ve heard a lot of complaints from people who don’t like the fact that insurance companies use credit in their underwriting.

Some people have absolutely no idea that it’s used in the rate at all.

At the end of the day, there’s not much we can do about it though. Insurance companies have been using credit in their rates for decades, and that’s not likely to change.

By the way, insurance companies don’t pull your credit like a mortgage company or credit card company does. There is no negative impact on your credit as a result of an insurance company looking at it.

When I say “pull” what I mean is that the insurance company is doing what’s called a soft inquiry, which is not the same thing as having your credit pulled (hard inquiry).

When does credit play a role in insurance rates?
It’s important to understand that insurance companies don’t continuously check or monitor your credit. Usually, they only check it when you first get a quote and/or sign up with them in the very beginning.

This means that if your credit score increases (or decreases) your insurance company does not automatically know about it.

So, to my customers question of whether or not his increased credit score will lower his rates, the answer is not automatically.

What has to be done on our side as the agent is contact the carrier the insurance and ask them to do what’s commonly referred to as a “re-score”. This is when the insurance company can re-run the person’s credit (soft inquiry) to see if there is any positive bearing on the rate.

This isn’t something that the insurance company is going to let the agency do every single year, so it’s not worth even asking unless there has been a significant change in your credit score, and only you as the customer would know if that was the case.

If you’d like to get a better handle on your credit rating, it could be helpful to setup credit monitoring. We hope this was helpful! As always, leave us comment below if you have any questions.

Why Do My Auto Insurance Rates Keep Going Up Even Though My Car Keeps Getting Older?

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Why do my auto insurance rates keep going up even though my car is getting older?  At Joyce, Jackman & Bell Insurors, many of our clients ask this question so I would like to address it from a couple of angles.

First things first, even though it’s called car/auto insurance, it covers more than just your car. It should technically be called “auto-owners” insurance, similarly to how home insurance is actually called “home owners insurance”.

It’s important to understand that there are a lot of variables that go into insurance premiums, and with auto insurance, it’s no different.

The insurance company is much more concerned with you crashing into someone and causing them (or yourself) bodily harm, or death, than they are about your car. A car is a material possession which can be replaced.

A human life is not.

When is the last time you looked at your auto insurance policy?
If you look at it you’ll notice there are a lot of different coverages on your auto policy.

Bodily injury
Property damage
Un-insured motorist
Under-insured motorist
Medical Payments
Loss of Income
Funeral Expense
Loss of use
Rental Reimbursement

These are all things that you are covered for on your auto policy. How many of them have to do with your car?

None.

How many of them have a price next to them on your policy?

All of them.

Your car isn’t the only thing you’re being charged for on your policy
That’s because auto insurance covers far more important things than your car as mentioned above.

Let me re-phrase that: your car insurance rate isn’t just based on your car.

You’re not the only one…
It’s also important to understand that you are not the only person your insurance company insures. You are one fish in an ocean of other fish, sharks, and sea creatures, all who have different characteristics and risk profiles.

Insurance is all about spreading costs over a large number (risk pool) of people, which each person paying their fare share. That risk pool is constantly changing, and is impacted by a ton of different things, including the overall economic climate.

This means that you are sharing in the cost of millions of other people, many of whom may have poor loss history and/or credit.

That’s what insurance is though — sharing in the cost.

The next time your auto insurance rates go up, take a look at the big picture. Make sure you’re looking at ALL of the coverages, and corresponding rates.

Hope this helps!  If you would like to know more about Car Insurance be sure to visit our page dedicated to it.