Do any of you know where I can get a copy of a Homeowner Depreciation Schedule for Dwelling and Contents to that I can help explain the difference between RC & ACV to my clients. I’m not an adjuster, I’m an agent and non of my carriers seem to have one????
Thank You,
OmniSure
Omnisure, I doubt you will find a depreciation schedule that will be worth much. There are too many variables involved for one to be practical. Talk to your county tax assessor’s appraisor to see what they use on dwellings. On contents, it’s every adjustor/company for themselves, from my experience.
When I worked full time with a large homeonwers carrier, we were provided with a hardshell depreciation schedule developed by the Internal Revenue Service (I believe) and adapted by my employer for each claim reps use. This schedule was extensive but not totally all-inclusive of items available in the market place. The IRS might have their listings available on their web-site.
why wouldn’t you just write your HO policies on RC anyway? am i crazy, but why would you want to write on ACV or is that the point you’re trying to make?
“Depreciation” from an insurance standpoint is not synonymous with the “book” depreciation that the IRS suggests or allows. That something has no book value / has been written off doesn’t mean that it isn’t still fully functional; and its value as a used piece of equipment may in fact be in excess of its original cost. While guidelines can be helpful, most situations are unique.
RC vs ACV? When the carriers decided to offer RC coverage they changed the entire concept of insurance. No longer was an insured put back in his position before the loss, he was bettered. In settling claims for more than the value at the time of the loss, the insured is actually put in a position better than what he had. That is not insurance; that’s an investment.
Thank you ACV vs. RC for the article link. I partially agree with Mr. Boggs in his discussion, but mostly disagree with his premise that RC does not violate the rule of indemnification. What Boggs fails to discuss is that the property owner is better off in RC because his costs in re-tooling and/or replacement (after RC loss) are either delayed or removed because the insurance carrier gave him something new for something not new. The time the property owner is down due a loss can, and usually is, adjusted. The argument is normal that the property owner “did not plan for the loss to occur NOW.” The question is, when does the property owner plan for the loss? They do not; this is why insurance is a benefit when the loss occurs. Competition for more premium dollars is what drove the RC movement. Even Allstate has recently experimented with this theory in auto coverage – giving a new vehicle for an older vehicle in the event of a total loss. New ideas are certainly worthy of discussion, but the principles of insurance should be adhered to in the end.
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Check the “Documents” section of Claimspages.com. I think they at least have a contents dep schedule.
Do any of you know where I can get a copy of a Homeowner Depreciation Schedule for Dwelling and Contents to that I can help explain the difference between RC & ACV to my clients. I’m not an adjuster, I’m an agent and non of my carriers seem to have one????
Thank You,
OmniSure
Omnisure, I doubt you will find a depreciation schedule that will be worth much. There are too many variables involved for one to be practical. Talk to your county tax assessor’s appraisor to see what they use on dwellings. On contents, it’s every adjustor/company for themselves, from my experience.
When I worked full time with a large homeonwers carrier, we were provided with a hardshell depreciation schedule developed by the Internal Revenue Service (I believe) and adapted by my employer for each claim reps use. This schedule was extensive but not totally all-inclusive of items available in the market place. The IRS might have their listings available on their web-site.
why wouldn’t you just write your HO policies on RC anyway? am i crazy, but why would you want to write on ACV or is that the point you’re trying to make?
Link to the IRS’, “How to depreciate Properly”:
http://www.irs.gov/publications/p946/index.html
“Depreciation” from an insurance standpoint is not synonymous with the “book” depreciation that the IRS suggests or allows. That something has no book value / has been written off doesn’t mean that it isn’t still fully functional; and its value as a used piece of equipment may in fact be in excess of its original cost. While guidelines can be helpful, most situations are unique.
RC vs ACV? When the carriers decided to offer RC coverage they changed the entire concept of insurance. No longer was an insured put back in his position before the loss, he was bettered. In settling claims for more than the value at the time of the loss, the insured is actually put in a position better than what he had. That is not insurance; that’s an investment.
Hey, Claims Guy, there is an article that talks about what you just said about ACV vs. RC on http://www.mynewmarkets.com.
I had to go back and look it up, it’s titled: “Replacement Cost Violates Indemnification Rule.”
It ran on June 4 and it appears to be part of several artilces on property valuation.
Thank you ACV vs. RC for the article link. I partially agree with Mr. Boggs in his discussion, but mostly disagree with his premise that RC does not violate the rule of indemnification. What Boggs fails to discuss is that the property owner is better off in RC because his costs in re-tooling and/or replacement (after RC loss) are either delayed or removed because the insurance carrier gave him something new for something not new. The time the property owner is down due a loss can, and usually is, adjusted. The argument is normal that the property owner “did not plan for the loss to occur NOW.” The question is, when does the property owner plan for the loss? They do not; this is why insurance is a benefit when the loss occurs. Competition for more premium dollars is what drove the RC movement. Even Allstate has recently experimented with this theory in auto coverage – giving a new vehicle for an older vehicle in the event of a total loss. New ideas are certainly worthy of discussion, but the principles of insurance should be adhered to in the end.