In the event of a claim, your insurer will have to reimburse you according to the value of your property on the day of the loss. However, it may seem difficult to calculate the true value of your property and you may find it hard to get an idea of how much you are entitled to. It all depends on the method of compensation provided at the time of signing your contract. It may be an indemnity based on the use value, the reconstruction value or the replacement value. Let’s take stock of what this really implies.
Real estate, what compensation?
In general, Quotes for homeowners insurance offer two types of compensation. On the one hand, the “use value”, otherwise called the dilapidated reconstruction value deduced, and on the other hand the “new value”.
Regarding the use value, it implies that your property is losing value over time. An expert will have to determine, in the event of a disaster resulting in the destruction of your property, the amount necessary for its reconstruction in the same way. It will subtract from this sum the percentage of obsolescence of your property, which will surely compromise its reconstruction in the same way, if you are not able to complete the investment.
Regarding the replacement value, this is a guarantee that will supplement the loss relating to the obsolescence of the property concerned. Beneficiaries pay higher monthly installments each month but benefit, in the event of a claim, first from the value of use as well as from all-to-everyone, then in a second step of a complement of compensation. Be careful though, most insurances impose a refund capset at a certain percentage of the total value of the property. In general, this percentage is around 20 to 30% of the original value of the property. Contrary to what one might think, part of the refund is therefore your responsibility. Property indemnified at new value is thus compensated in value in use plus a coefficient of obsolescence.
On the other hand, there are some conditions to the operation of the new value guarantee. For example, it will be necessary for the housing to be rebuilt within two years after the disaster and this building will have to be rebuilt without making too much modifications compared to the original property.
Movable property, what compensation?
Both types of compensation may be present in your Multirisk quotes for homeowners insurance policy regarding your movable property. You can therefore be redeemed for use value or new value based on your basic agreement with your quotes for homeowners insurance. For example, to qualify for the new value compensation, it is possible that the property concerned must have been acquired for at least two years. Conversely, property dating from less than 6 months to one year is not generally applied with a coefficient of obsolescence.
Regarding your valuable goods and other valuable objects, you will be compensated on the basis of their declared value in the sales room on the day of the loss, unless you have taken out a new value guarantee, which however increases the monthly payments considerably on this type of contract in proportion to the initial value of the insured property.
In a nutshell, be careful not to confuse “new value” with “new equipment “”. Some policyholders take an optional re-equipment warranty. Indeed, the insurer takes into account the age of the movable property to repay it, but the seller, him, charges a brand new device. The retrofit option will come to complete the unrefined portion, going further than compensation value nine, and will allow you to fully re-equip. Remember, however, several things: the contribution can go up from 10% to 15% on average. In addition, there is an annual limit, a deductible and limits on the age of the furniture or appliances concerned. Note also that damaged property generally needs to be replaced within six months. To study carefully, therefore.
Finally, whatever the type of contract you have, remember that at the time of signing, you have subscribed a maximum repayment capital. It cannot be exceeded, even if your movable and immovable property have been destroyed in full in the disaster. So be sure to estimate the value of your assets at the time of signing the contract and to change this estimate in case of evolution.