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Old 05-31-2011
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Charrob, many insurers like to play a game with valuation and premiums. They'd like you to pay a premium based on the highest value, so you pay them the most money.

Now what happens if they have to pay out a total loss? Depending on your stat insurance regulations, and your insurance policy (yes, you really have to read all that painfully small print, and they do actually intentionally make it hard to read) you may only be entitled to "book value, replacement or market value, or xxxxx, whichever is least". And those terms will usually be defined by state law, but oddly enough, the insurers often don't follow the definitions because they know that most customers won't know what the laws require, either.

So now you've paid for $10k of insurance, and they'll say "Well, we found one for sale two counties over for $3500, so that's what we're paying you."

This is not my opinion, this is the voice of experience with how insurers have actually behaved, and how state laws do and don't force them to play nicely.

So if they think it is worth $10k, that's great. But unless they are writing "agreed value" coverage, where they agree to pay you $10k in the event of a total loss, demand a sample policy and look for the gotchas. They're all very reluctant to provide a sample policy.

And even with "agreed value" some of them like to play games. I spoke to a Progressive rep about that (for a car) and he eventually admitted they write coverage "for the agreed value or the replacement cost, whichever shall be less".

These are not your friends. By all means shop, but remember that their only interest is making your money into theirs, and not giving back any more than they have to. The ones who deal most fairly? Still want all your money, they're just sharp enough to know that by playing nice, they can keep the customer longer, or for life.
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