Insurance Matters: Property Insurance Issues Part 1

My January column for CU Management:

You’d think that the coverage on your credit union’s buildings and business property would be pretty straightforward. It’s a place I see plenty of problems, though.

This and the next few installments of this column will focus on credit union property insurance, where I’ll pose the issues as questions you can put to your agent.

Do we have replacement cost coverage?

There are two ways most insurance policies value property:

1) Replacement cost is the cost to buy the lost item new. It’s the cost to rebuild the building with current cost of materials and the current cost of labor. It’s the cost to buy a new computer that is stolen.

2) Actual cash value is usually defined as replacement cost minus depreciation. It also can be thought of as the market value of an item. ACV is always less than replacement cost.

Whole Article Here