- Video ~ Cost Approach to Valuation in Insurance
One of the basic decisions you need to make when purchasing an insurance policy is the type of valuation you would like it to be based on. This will affect the amount of coverage you wish to purchase, policy premiums, coinsurance and much more. Insurance policies need to have a fair means of valuing your property at the time of a loss. The two basic choices are: “Replacement Cost Valuation” and “Actual Cash Value”.