Insurance Agent Joseph Norena Examines Replacement Cost vs. Actual Cash Value Insurance

The year 2017 ended with the worst wildfire in California history. The catastrophic fires destroyed thousands of homes and businesses.

“This left many home and business owners scrambling to find their insurance policies where they discovered the importance of having replacement cost vs. fair market or actual cash value insurance,” said Joseph Norena, of Bridge Norena & Associates Insurance Agency. “In most cases, it was the difference between rebuilding and complete financial ruin.”

With replacement cost insurance, one’s insurance company agrees to replace or repair items damaged or lost due to a covered loss, such as fire, theft, etc., with same or like quality. In the event the damaged or lost item is no longer available, the company has a responsibility to replace it with a similar item that is closest in like or quality regardless of cost. “This is an added measure of protection and peace of mind for consumers,” noted Norena.

Conversely, for policyholders with fair market or actual cash value coverage their real property, personal property or tenants improvements and betterments is calculated by basic cost, less depreciation. “With this coverage, your insurance company has no obligation to take other important factors into account, such as the quality of materials used in the construction of your home,” added Norena.  

Although affordable, fair market or actual cash value policies can leave owners significantly underinsured. “For example, hundreds of historical properties in California were partially damaged or lost due to the fires,” concluded Norena. “Properties with this type of coverage will be rebuilt with basic materials, instead of being restored with the same or like quality as before.”   

About Bridge Norena & Associates Insurance Agency

Bridge Norena & Associates is a family owned and operated insurance agency that provides a number of diverse insurance products to various types of state-licensed facilities within California. Its insurance services include package policies, business auto, workers’ compensation, student accident, special event and more. For more information, please call (818) 225-1627, or visit www.bridgenorena.com. The office is located at 23875 Ventura Blvd., Suite 105, Calabasas, CA 91302.

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