Valuation Method
Means of determining that a loss has occurred and setting an economic value on it so that a claim can be paid. When an insured suffers a loss, an adjuster must determine that it actually occurred, that it was covered by insurance, and the value of the lost or damaged property. The adjuster, with the help of the insured, determines the cost to repair or replace the covered property. The adjuster computes actual cash value, or replacement cost, minus depreciation. For indirect losses, such as business interruption, the adjuster must make rough estimates, and then must consider COINSURANCE and adjust claims payments for it.
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Cost of replacing damaged or destroyed property with comparable new property, minus depreciation and obsolescence. For example, a 10-year-old living room sofa will not be replaced at ...
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