Subject: Total Loss in LA – Questions about ACV Policy
Hello everyone,
Last month, we lost our home in Pacific Palisades. We have an Actual Cash Value (ACV) policy with the CA Fair Plan that includes approximately $600,000 in Coverage A and 25% extended dwelling coverage.
Since this is a total loss, the CA Fair Plan will provide the fair market value. I’m curious about how they handle the extended dwelling coverage in relation to an ACV policy. Does anyone have insights on this?
Thank you for your help!
I’m really sorry to hear about your loss in Pacific Palisades. Dealing with a total loss is incredibly challenging.
Regarding your question about how the extended dwelling coverage applies with an Actual Cash Value (ACV) policy under the CA Fair Plan, it’s important to clarify a couple of points. Typically, ACV policies will pay out the fair market value of your home at the time of the loss, which is the replacement cost minus depreciation for age and wear and tear.
The extended dwelling coverage usually means that in the event of a total loss, your policy may pay an additional percentage of your dwelling coverage. In your case, if you have a 25% extended dwelling coverage, this could potentially increase the amount you receive beyond the standard ACV payout.
For example, if your home’s ACV at the time of loss is $600k, the extended coverage could add an additional $150k, totaling up to $750k. However, it’s crucial to check how exactly the CA Fair Plan calculates and applies this in their payouts, as policies can differ in terms of specifics.
I recommend contacting your insurance broker or the CA Fair Plan directly for clarity on how they handle these calculations in your specific situation. Keeping detailed records and documentation of your loss will also be important as you navigate this process. Best of luck, and I hope you find some resolution soon.