Replacement Cost vs Actual Cash Value: Understanding the Difference

You went out with the family to a Phoenix Suns game or to visit the Mesa Arts Center in Arizona. When you came home, you discover your home had been broken into. A ton of your personal belongings were missing, including your brand-new computer and flat-screen smart TV. You begin to worry about whether your homeowners insurance policy will cover the full replacement of these items. Well, to be honest, it depends.

What Is Replacement Cost?

If you have replacement cost coverage, then it will pay for the replacement of your belongings of a similar quality without considering depreciation value.

What Is Actual Cost Value?

If you have actual cost value coverage, then your policy is going to pay for the replacement of your belongings up to the actual cost value of the item at the time the item was damaged or stolen. This coverage will include depreciation when determining the amount that you receive.

The Difference in Laymen's Terms

Let's say you purchased a television three years ago and it was roughly $2,500. This TV was damaged in recent a home fire. It is an item that it covered under your standard homeowners insurance policy.

  • With the replacement cost policy, you will be reimbursed up to the full value of the TV without depreciation included. In other words, you would receive up to $2,500.
  • With the actual cash value policy, you would receive reimbursement for the TV minus depreciation, which could easily only be a few hundred dollars.

As you can see, replacement cost is the better bargain here. If you are unsure as to what type of coverage you have, you may want to speak to your independent agent. The last thing you want is for a storm to come in that causes damage to your roof and porch and ends up damaging expensive household items only for you to find out that you only have actual cost value coverage to repair your home's sinking foundation and replace your personal belongings.

What Happens If I Don’t Have Car Insurance in Mesa Arizona?

Numerous dangers exist when driving without car insurance. Researching, buying, and maintaining valid car insurance is one of the important responsibilities of owning or leasing a vehicle. For whatever reason, many drivers do not address this primary responsibility imposed on them. Many people have different excuses for not being able to get in contact with us to buy or maintain a valid insurance policy on their vehicle. Some people will say that they do not have the money to pay for car insurance while others say they are forgetful and do not maintain an up-to-date policy. Others will still argue that car insurance is not necessary for a variety of reasons. Whatever the excuse, there are personal and legal consequences for driving without car insurance in Mesa Arizona.

First of all, driving without car insurance is illegal. In cases where a driver is in an accident or pulled over by the police, one of the consequences of not having insurance will surely include the suspension of your vehicle registration and suspension of your driver's license. While the specifics of the fine in Mesa, Arizona, 85215 can vary, all states require drivers to have valid car insurance. There are also legal penalties that will be imposed if and when you are caught driving without car insurance.

Many states take these penalties a step further by suspending your driver’s license and impounding the vehicle. In some states, law enforcement can even arrest the offending motorist. Driving without car insurance is an explanation in itself because you will have no protection. In addition, if you ever involved in an accident with no car insurance, you will not be able to provide protection for other passengers in your vehicle.

Of course, there is a solution which is easy and affordable. Getting affordable quotes can be done online so that our agents can give you the car insurance coverage you need to stay in accordance with the law and have the protection you need when you take your vehicle out on the road. As your independent agent in Mesa Arizona, we can help you find the best coverage for your budget by requesting insurance quotes with Lifetime Investments.


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Car Insurance for Teens with an Arizona Learners Permit

Arizona teens and car insurance…

Arizona teens and car insuranceIn our growing Arizona communities, it is almost unbelievable how teens grow up so fast.  Now, your child is about to turn in those toy cars for a shiny new learners permit. Now is also the time to think about car insurance for your teen in Arizona. With the help of our local agents, you will be able to feel secure knowing that your teen is covered wherever the road will lead him or her.

What are the options?

In  Arizona, teenage auto operators are not added to a policy until they actually get their driver’s license.  They are automatically covered under the parent’s policy while driving with a permit.  Once licensed, it is best to add the youthful operator onto the parents policy.  The coverages and cost is so much better than insuring them on a separate policy.  Also, if the teenage driver is under 18 he or she is unable to purchase an insurance policy.  Since the insurance policy is a contract the youthful operator must be 18 before he or she can have their own policy.

Another issue that comes in to play is the youthful operator between 18 and 21 years of age and even those that are older and still being supported by their parents.  If the teenage driver does secure his or her own insurance and purchases minimum limits of liability required by the State; if he or she is involved in a serious at fault accident and if the policy liability limit is not sufficient, the parents can be held liable for the additional cost to settle the claim.

This issue is covered under Arizona State Law and can be found in the Family Purpose Doctrine and the elements of the doctrine can be read in the case of Brown v. Stogsdill, 140, Arizona .485.682 P2d 1152 (App. 1984) as follows:  There must be a family with sufficient unity so that there is a head of the family, the motor vehicle responsible for the injury must have been one furnished by the head of the family to a member of the family and this vehicle must have been used on the occasion in question by the family member with the applied or expressed consent of the head of the family for a family purpose.

Forget the headaches!

It is easy to spare yourself from a lot of headaches and unintended payments. Contacting us to speak with your independent agent so we can answer any questions you have about Arizona Learners Permit coverage. We will not only help you get a car insurance policy that will protect your teen driver, but you can also feel comfortable knowing that you are getting an affordable rate.

Ask ME the hard questions!
Jan Vitale
Independent Insurance Agent
Proudly serving her clients and her industry for 30+ years