Replacement cost vs. Actual cash value – What does that mean?

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An insurance policy’s usefulness is determined by the policy language used. Specific policy language determines what is covered, what is excluded and the amounts covered under the policy. Reviewing your insurance policy language every now and again may be helpful in the event of a claim, as you would have a better understanding of what may be covered.

Insurance policies are full of language and terms that may not be clear right off the bat. Many terms are specific to the industry and to the specific type of insurance that is being purchased. Two such terms are Replacement Cost and Actual Cash Value. These terms can be a bit confusing to decipher between.

Replacement cost vs. Actual cash value in Hawaii:

  • Replacement cost is very simple: It is literally the cost to replace your item with an item of similar quality. Replacement cost policies tend to be a bit more expensive since you are essential getting a brand new item for one that may have otherwise depreciated. Replacement costs are agreed upon by all parties before the insurance policy is finalized. If you have high-ticket items (jewelry, art, RV, boat, luxury vehicle or classic car) this may be the best type of coverage if you can afford it.
  • Actual cash value is the cost to replace the item minus any depreciation. For example, if you were in an auto accident and you had an actual cash value policy, your insurance would pay out the cost of the vehicle minus any depreciation, so if your vehicle is worth less than what you owe you would be responsible for paying that difference out of pocket, unless you had gap insurance. An actual cash value policy can put you in a tight spot if your items cost more to replace or repair than your policy pays out. Depreciation values for big ticket items like RVs or luxury cars can be quite large, so make sure that you have a nest egg and be prepared to pay some out-of-pocket for a loss if you have an actual cash value insurance policy.

No matter which policy type you choose, the local experts at Carr’s Insurance Agency can answer any questions and walk you through the different types of scenarios to see which policy type is right for your situation. Carr’s Insurance Agency in Honolulu, Hawaii can guide you through your homeowner’s insurance policy and more, like auto insurance. Their years of insurance experience can save you a bundle, and they live right in your area, so know firsthand what your insurance needs might be. You can also visit their insurance website 24/7 to learn more about the insurance products they offer.

Five steps for filing an insurance claim

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In the moments after an auto accident there are a million things that will run through your head. Checking yourself and other passengers for injuries is probably the first thing you do followed by visually assessing the damage to your vehicle. Your next steps may make the insurance claims process a bit easier, so learning these steps prior to an accident may trigger your memory should you find yourself involved in an auto accident.

5 tips for filing an insurance claim in Hawaii:

  • Call 911: Always alert law enforcement to an auto accident whether it is single or multiple vehicles, on private property, etc. The 911-dispatcher will ask a series of questions to determine if an officer is needed, usually if there is significant vehicle or property damage, there is an injury or if impairment is suspected. If an officer is not needed at the scene, make sure to file a police report at your local precinct as your insurance company may need a police report in order to process certain claims. This process also works for claims such as theft, vandalism or hit-and-run damage to your vehicle.
  • Gather information: You will need to collect information from any parties involved in the auto accident or information from someone whose property may have been damage by your vehicle (and vice versa). Make sure to get a phone number, address, auto insurance company and policy number, a description of the vehicle (make, model, and year) and a description of the damage done to the vehicle. If you have a smartphone or camera handy take photos of all vehicles, buildings and surrounding areas. Make sure to photograph vehicle positions, street signs and anything else that may be useful in the claims process.
  • Talk to your agent: Alert your agent to the fact that you have been in an auto accident and let them know the details. If it is a smaller, solo accident without significant damage to your vehicle, it may be cheaper in the long run to avoid an insurance claim and pay for the damage out of pocket. Your agent can guide you through your options and help you make the best decision for your situation. Your agent may also be an advocate for you when dealing with the insurance company of any party that was involved in an accident with you.
  • File a claim: If you and your agent have determined that filing a claim is the best option for you, then your agent can assist you in that process. Provide your agent with the information of anyone else involved in the auto accident, any photos or videos that were taken at the scene and if there is one, the police report. Your agent will start the claims process and send out a claims adjuster to assess the damage to your vehicle and let you know how much the damage will cost to repair. This does not necessarily reflect the amount you will pay, that depends on who is found “at-fault” for the accident.
  • The waiting game: The claims process can take a bit of time, especially if there are multiple parties and multiple insurance companies involved. Check in with your agent and feel free to ask any questions you may have about the process.

We always hope that none of our clients will experience the stress of an auto accident, but we know that it happens (that’s why we’re here!) The local, independent agents at Carr’s Insurance Agency in Honolulu, Hawaii can assist you in filing a claim and finding a reputable repair shop. They are right in your backyard, so they know the most trusted repair shops in the Honolulu area. Their years of insurance experience can save you a bundle. You can also visit their insurance website 24/7 to learn more about auto insurance or the other insurance products they offer like Classic Car or ATV insurance.

 

Homeowner’s Insurance in Hawaii – Don’t let your home be a house of horrors

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Time to break out the conical hats, black cat decorations and the pumpkin seeds; Halloween is on its way! Whether you intend to go all out and build a spooky scene in your front yard complete with a giant spider and web or if you plan to put up a few jack-o-lanterns you can take some extra steps to ensure that your Halloween spirit does not turn your home into a personal house of horrors. To avoid a costly homeowner’s insurance claim in Honolulu, HI such as a fire, property damage or a personal liability claim, make sure that your Halloween decorations and any area that party-goers or trick-or-treaters access is free of debris and tripping hazards.

Avoid a holiday homeowner’s insurance claim in Hawaii:

  • Décor: Many Halloween decorations are made of paper or wood products. Keep these decorations away from open flames and away from lights as the décor could spontaneously combust resulting in a fire. Lit jack-o-lanterns should be extinguished prior to going to bed or leaving the house for an extended period of time. A pumpkin that is too dry or a flame that is too close to a wooden porch could spark a blaze, which if not caught quickly could be quite destructive. To eliminate open flames altogether, try flameless LED candles.  Speaking of lighting, make sure that any lights hung are the appropriate type (indoor or outdoor) and that they are strung in such a way that no one could trip over or get tangled in.
  • Tripping Hazards: Little ones (and adults too!) can get over excited during a scare and could hurt themselves on décor that is not properly secured or in the way. Moving items like porch furniture or lawn décor could help prevent accidents outside. If you plan to throw a Halloween party indoors with little ones, make sure that sharp edges and corners are secured and tripping hazards such as side tables or ottomans are out of the way. Taking a few extra steps to ensure that your guests are safe could save you from a costly personal liability claim.
  • Treats and tricks: Another wonderful part about Halloween is the food! Candy corn, lollipops and caramel apples are delicious treats for young and old alike; however they do present a choking hazard for small children. Make sure that bite-size or chewy treats are kept out of reach of tiny hands.

Halloween can be a fun time for friends and family, not a time to worry about household accidents. If you have any questions about what your homeowner’s insurance policy covers in terms of fire, property damage or personal injury liability, your licensed insurance agent in Honolulu, Hawaii can assist you.  The local, independent agents at Carr’s Insurance Agency can assist you with examining an existing policy or setting you up with a new policy. Their years of insurance experience can save you a bundle. You can also visit their insurance website 24/7 to learn more about auto insurance or the other insurance products they offer like personal umbrella insurance.

Renting a Uhaul or similar rental moving truck this weekend? Make sure you read this first!

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A common question we receive is whether or not our insurance would cover us for a rental motorhome or moving truck in Honolulu, HI. And the answer really depends solely on the size of the vehicle (in addition to what coverage you currently carry, of course).

When talking about your collision and comprehensive coverage, your standard auto policy will cover the usage of a temporary replacement vehicle usually up to 12,000 GVW. If a vehicle is over this GVW, it would be excluded from coverage. Additionally, if the cab is separated from the bed, this will also create an exclusion from coverage for most auto insurance policies.

Truck rental companies typically offer four types of coverage.

Damage Waiver: covers you in case of damage to the truck. If you do not purchase this coverage, you are responsible for any and all damage to the vehicle, no matter what the cause. If you decide to decline this coverage, you may be responsible to pay the damages to the truck even if they are not your fault. Something to keep in mind is depending on the extent of the repairs, you may be held responsible for loss of use on the vehicle.

Liability Coverage:  covers you in case you hit something or someone. Your auto policy may cover this, but please call us in advance before you rent a vehicle to make sure. Each company is different.

Cargo Coverage: Your auto policy will NOT cover any cargo that you are carrying. Period. If you are moving valuables, you may consider this coverage, depending on the values. If you’re moving a mattress or other item that will likely not be damaged, it would probably be wise to save your money, but only you can decide.

Personal Injury Protection: This is a no-fault insurance and can be used anytime you’re involved in a motor vehicle collision, regardless of the motor vehicle you’re traveling in.

With anything, please feel free to call us with questions at (808) 836-CARR (2277). This article is meant to be informative, but not a means of advice. If you have questions about a rental vehicle, please contact our office and speak directly to a licensed agent at our insurance agency in Honolulu, Hawaii or you can visit our website 24/7.