Insurance Replacement Appraisals:’Used’ Isn’t ‘New’

A customer brings in a four-year-old Rolex watch and a platinum and gold wedding band for an insurance appraisal. The Rolex is in “like-new” condition, and the wedding band is in good but obviously used condition, with some nicks and a worn shank. Should you appraise the items for replacement with comparable new items? Isn’t that what the client needs for insurance purposes? Not necessarily. If the client has a “cash value” policy, such an appraisal probably will result in higher premiums, but reimbursement in the event of a loss will be based on the condition of the actual items. That’s because cash value policies usually call for the value of an item to be determined at the time of loss. If a loss occurs, the insurer is obligated to do one of the following, whichever costs less: replace what the client lost; pay the client the actual cash value of the loss; or pay the c
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