to clarify further, the Actual Cash Value is determined by market value which is assessed quickly by a licensed RE appraiser minus the value of the land. The actual home/building is the “improvement” to the land. The land is simply the raw land or lot value.
Although the insurance company needs the “market comparison” approach, if they used a “cost value approach”, then the improvements would more accurately be assessed based on the cost to rebuild. However, they get the rebuild cost from a builders (Licensed General Contractor) type estimate which is as accurate as you can get as these are the guys that are going to swing the hammers.
Also remember that the insurance company will pay the greater of the appraised value (improvements only) or a rebuild contractors estimate less depreciation.
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Also on a separate note,
If you have any problems with your insurance company, you can call 1-800-927-HELP or http://www.insurance.ca.gov – CA Ins. Commissioner Steve Poizner is very consumer sided and will ensure any carrier with repeated complaints gets their act together.
