Subject: Seeking Clarification on ACV Policy and Extended Dwelling Coverage
Hello everyone,
Last month, we unfortunately lost our home in Pacific Palisades. We have an Actual Cash Value (ACV) policy with the CA Fair Plan, which includes approximately $600k in Coverage A and 25% extended dwelling coverage.
Since it’s classified as a total loss, I understand that the CA Fair Plan will provide a payout based on the fair market value of our home. However, I’m curious about how the extended dwelling coverage is applied in conjunction with an ACV policy.
Any insights would be greatly appreciated!
Thank you!
I’m really sorry to hear about your loss; that must be incredibly difficult. With an Actual Cash Value (ACV) policy and the extended dwelling coverage through your CA Fair Plan, here’s how it typically works:
ACV Payment: Since you have an ACV policy, the payout will be based on the fair market value of your home at the time it was lost, minus depreciation. This means you’ll receive a payment that reflects what your home was worth just before the loss occurred.
Extended Dwelling Coverage: The additional 25% extended dwelling coverage generally applies to the dwelling limit specified in your policy. If you have a dwelling coverage of $600k, the extended coverage would add an additional $150k (25% of $600k). This is intended to help cover costs associated with rebuilding or additional expenses that may arise.
In scenarios involving a total loss, the extended dwelling coverage can essentially provide you with more funds beyond the ACV calculation to assist with rebuilding or other related costs, but it’s essential to confirm this with your insurance adjuster, as each policy can have specific terms.
Make sure to review your policy documents closely and reach out to your insurance representative for clarity on how these provisions will be applied in your specific situation. They can offer the most accurate information based on your policy terms. Wishing you strength during this challenging time!