Insurance policies are often filled with complicated language that can make it hard to decipher whether or not you're covered, and most importantly, to what degree. The ability to understand this language in the event you need to file a claim can be the difference between you being protected or you being left to cover the cost of the damage on your own.

Fair Value

When a policy includes language about fair value replacement, it's a direct reference to the amount of compensation the insured can obtain in the event the insured property is damaged or lost. Unlike actual cash value, which is factored based on the original cost of the equipment, minus depreciation, fair value states that the insured will be compensated based on the current value of the asset if it were to be bought or sold now. 

Consequently, if the value of the asset has increased since the time it was originally purchased, you can be compensated for the higher value, not what you originally paid. It's essential you be compensated for your loss accurately.

Direct Loss

Direct loss is another sometimes confusing term in that it makes it sound as though only damages caused directly by a covered event are covered. Take an earthquake, for example. If the earthquake damages the foundation, damages to the foundation are thought to be directly linked to the incident. 

However, if the plumbing is damaged as a result of the foundation crack and it leads to a flood in the home, the loss incurred from this event is often considered to be a direct loss. Don't assume that the chain of events that follow one source of damage is not covered, as well. It's important to seek compensation for the full extent of damages you've sustained. 

Insurance Adjusters

A public insurance adjuster can help you make your way through this complicated language to ensure your claim is settled fairly. As seasoned authorities within the insurance industry, these professionals understand how to read and understand policies so that they can ensure their clients receive any form of compensation or assistance to which they are due based on their policy agreement. If you need to file a claim for property loss, damage, or any other hardship, a public adjuster can work to ensure your insurance policy comes through for you.

For more information on insurance, reach out to a company like Anthony Ricciardi Licensed Public Insurance Adjuster.