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A shirt that you bought for $100 3 years ago is not valued at $100 now.
by RegnisGnaw 4y ago
A shirt that you bought for $100 3 years ago is not valued at $100 now.
- Maxion 4y agoBut, it costs $100 to replace it. (Or more likely $110-120 due to inflation)
- RegnisGnaw 4y agoI’d check your car or home insurance then. They don’t work that way.
- danpalmer 4y agoMany do. "New for old" is fairly standard for home insurance, at least in the UK. Maybe it differs for car insurance?
- 0xffff2 4y agoYour car insurance works that way, in the sense that they generally have to pay you enough to replace the car like for like. A shirt is a bit different in that there is not a robust used shirt market where you can go out and buy a nearly exactly equivalent shirt. Given that, it seems reasonable that they would pay for the replacement via a similar new shirt. Home insurance actually works _exactly_ this way. As long as you have a mortgage in the US, you're going to be required to carry enough insurance to pay for the full cost of completely rebuilding a similar brand new home in the event the home is destroyed.
- RegnisGnaw 4y agoI’m talking about the contents. If someone comes in and steals your MacBook Pro, they are not gonna give you the value of a new one.
- 0xffff2 4y agoOkay, that I'm less sure on the car insurance, but again theft of belongings from your home is absolutely something that can be covered by home owner's or renter's insurance.
- RegnisGnaw 4y agoYes, its covered by the home owner's or renter's insurance. The issue is most people don't understand the value of an item. Let say you buy brand new MacBook Pro for $5000 in 2016. Someone breaks into your home and steals it. Most people when they file the insurance claim thinks the value of the MacBook Pro is $5000 (what they paid for it), but that's not true. The value is the price of a similar 2016 era MacBook Pro on second hand market places (ebay, etc). So lets say that 2016 MacBook Pro similar to yours is selling for $800 on ebay, insurance will compensate you $800.
- deleted 4y ago[deleted]
- tzs 4y agoMost insurers in the US offer a choice between actual cash value (ACV) or replacement cost value (RCV) coverage. You are describing ACV. Premiums are higher for RVC coverage but usually not a lot higher. With RCV coverage they will pay for a new MacBook Pro with similar RAM and storage and screen. I’d guess that most people on HN go for RCV on their homeowners’ insurance. I remember once looking into how much I would save if I switch the personal property coverage of my homeowner’s policy from RCV to ACV and while I don’t remember the amount I remember my reaction was “it’s that little!?” and I kept it RCV.
- JeffL 4y agoTo replace like for like, you go to a thrift store and buy a used shirt for $5. Or not. But a used shirt isn't worth the same as a new shirt.