I would like to understand difference in replacement and reinstatement clause in the insurance policy and its impact during claim settlement
Total Comments: 9
Posted: Mon Jan 26, 2009 12:38 pm Post Subject:
Hi dear..
I guess the replacement clause states till what worth the loss would be replaced by your coverage. On the other hand, reinstatement of coverage is mostly about reactivation of the coverage benefits following a stoppage/termination due to non-payment.
Roddick
Posted: Mon Jan 26, 2009 01:49 pm Post Subject:
sandeepkunte, kind of sounds like two different topics you've asked about you can have a policy that gives you replacement coverage, or an endorcement that does same, but reinstatement would have to do with the policys status, ie, you were less than ten days late when you made your premium payment so your police was reinstated without a lapse in coverage. please be more specific re: your question and i'm sure we can help you out.
Posted: Tue Jan 27, 2009 06:44 am Post Subject:
Reinstatement is when you ask the insurer to put a lapsed policy back into effect with a promise to pay the premium for the entire period. It, however, would depend upon the insurance company's discretion whether or not to allow reinstatement of the plan. As far I know, after a certain period of time even reinstating a plan doesn't remain a feasible option to the policy holder.
Replacement clause of a policy would guarantee that the insurer would replace the damaged object instead of paying the actual cash value for it.
I agree with Lori you have combined two different topics into one.
Posted: Tue Jan 27, 2009 12:22 pm Post Subject:
re-reinstatement as opposed to having to re-issue a policy i think this is both state dependent and carrier...meaning the carrier can be more lenient, in my state it's ten days (auto policys) you have up to ten day after the expiration to pay that premium for it to reinstate it, after that, it lapses and a new policy would have to be issued...
Posted: Sun Dec 26, 2010 12:39 pm Post Subject: reinstating my disability policy after has lapsed IN PA
Can I have my policy reinstated that just lapsed 4 days ago? I was already approved to receive income benefits.Before my policy lapsed.Will I be able to continue to receive my benefits if prudential reinstates my policy since they approved my claim before the policy lapsed?
Posted: Mon Dec 27, 2010 06:07 am Post Subject:
Can I have my policy reinstated that just lapsed 4 days ago? I was already approved to receive income benefits.Before my policy lapsed.Will I be able to continue to receive my benefits if prudential reinstates my policy since they approved my claim before the policy lapsed?
Asked and answered in your other post.
Posted: Sat Oct 15, 2011 05:56 pm Post Subject: fire insurance
what is the difference between new replacement value and replacement or reinstatement clause
Posted: Fri Oct 21, 2011 11:56 am Post Subject:
I believe that reinstatement means putting you back into the position you were in prior to the claim, which in the case of car would probably mean a payout of the current, depreciated value of the vehicle. New Replacement Value, in relation to car insurance would presumably mean the cost of a new vehicle of the same model as the original?
In my experience, new replacement value usually applies more to homeowners insurance than motor vehicle, but I could be wrong. I expect you'd pay significant more in premiums for a vehicle policy offering new replacement value.
Posted: Sun Oct 23, 2011 03:47 am Post Subject:
John's explanation of "reinstatement" above misses the mark. If you've had a collision while an auto policy was in a lapsed state, your reinstated policy will not cover the period of time your policy was in lapse. You will know this is true because they don't ask for past due premiums. The same is true with health and other disability insurance policies. When a life insurance policy is reinstated, you are asked to pay past due premiums because you would have paid those had the policy not lapsed, and there would be no claims exposure to the insurance company since a dead guy cannot reinstate his policy.
Reinstatement and replacement are not even in the same category. To reinstate a policy means to continue coverage under a previously existing insurance policy that lapsed for non-payment of premium (or some other, similar cause). When a contract is reinstated, it continues under the same terms as the original policy.
Replacement could refer to a substitute policy (Policy "B") that supersedes the coverage under an original policy (Policy "A") -- from the same or a different insurer.
Replacement value specifically refers to payment for a new piece of property on a like-for-like basis in the event of a total loss. It is commonly found in homeowner's and renter's property policies and may also be seen in commercial property policies. Replacement value, for example, would provide the funds to purchase a new, 2011 TV of a similar type to one that may be much older which was stolen or damaged beyond repair in a fire. What you couldn't do was have the insurance company pay the full cost for a 50" flat panel TV to replace a 25" color CRT TV. That's not like-for-like.
John is correct about replacement when it comes to auto insurance. Your policy would discuss ACTUAL CASH VALUE, which is replacement cost minus depreciation.[/u]
Posted: Mon Jan 26, 2009 12:38 pm Post Subject:
Hi dear..
I guess the replacement clause states till what worth the loss would be replaced by your coverage. On the other hand, reinstatement of coverage is mostly about reactivation of the coverage benefits following a stoppage/termination due to non-payment.
Roddick
Posted: Mon Jan 26, 2009 01:49 pm Post Subject:
sandeepkunte, kind of sounds like two different topics you've asked about you can have a policy that gives you replacement coverage, or an endorcement that does same, but reinstatement would have to do with the policys status, ie, you were less than ten days late when you made your premium payment so your police was reinstated without a lapse in coverage. please be more specific re: your question and i'm sure we can help you out.
Posted: Tue Jan 27, 2009 06:44 am Post Subject:
Reinstatement is when you ask the insurer to put a lapsed policy back into effect with a promise to pay the premium for the entire period. It, however, would depend upon the insurance company's discretion whether or not to allow reinstatement of the plan. As far I know, after a certain period of time even reinstating a plan doesn't remain a feasible option to the policy holder.
Replacement clause of a policy would guarantee that the insurer would replace the damaged object instead of paying the actual cash value for it.
I agree with Lori you have combined two different topics into one.
Posted: Tue Jan 27, 2009 12:22 pm Post Subject:
re-reinstatement as opposed to having to re-issue a policy i think this is both state dependent and carrier...meaning the carrier can be more lenient, in my state it's ten days (auto policys) you have up to ten day after the expiration to pay that premium for it to reinstate it, after that, it lapses and a new policy would have to be issued...
Posted: Sun Dec 26, 2010 12:39 pm Post Subject: reinstating my disability policy after has lapsed IN PA
Can I have my policy reinstated that just lapsed 4 days ago? I was already approved to receive income benefits.Before my policy lapsed.Will I be able to continue to receive my benefits if prudential reinstates my policy since they approved my claim before the policy lapsed?
Posted: Mon Dec 27, 2010 06:07 am Post Subject:
Can I have my policy reinstated that just lapsed 4 days ago? I was already approved to receive income benefits.Before my policy lapsed.Will I be able to continue to receive my benefits if prudential reinstates my policy since they approved my claim before the policy lapsed?
Asked and answered in your other post.
Posted: Sat Oct 15, 2011 05:56 pm Post Subject: fire insurance
what is the difference between new replacement value and replacement or reinstatement clause
Posted: Fri Oct 21, 2011 11:56 am Post Subject:
I believe that reinstatement means putting you back into the position you were in prior to the claim, which in the case of car would probably mean a payout of the current, depreciated value of the vehicle. New Replacement Value, in relation to car insurance would presumably mean the cost of a new vehicle of the same model as the original?
In my experience, new replacement value usually applies more to homeowners insurance than motor vehicle, but I could be wrong. I expect you'd pay significant more in premiums for a vehicle policy offering new replacement value.
Posted: Sun Oct 23, 2011 03:47 am Post Subject:
John's explanation of "reinstatement" above misses the mark. If you've had a collision while an auto policy was in a lapsed state, your reinstated policy will not cover the period of time your policy was in lapse. You will know this is true because they don't ask for past due premiums. The same is true with health and other disability insurance policies. When a life insurance policy is reinstated, you are asked to pay past due premiums because you would have paid those had the policy not lapsed, and there would be no claims exposure to the insurance company since a dead guy cannot reinstate his policy.
Reinstatement and replacement are not even in the same category. To reinstate a policy means to continue coverage under a previously existing insurance policy that lapsed for non-payment of premium (or some other, similar cause). When a contract is reinstated, it continues under the same terms as the original policy.
Replacement could refer to a substitute policy (Policy "B") that supersedes the coverage under an original policy (Policy "A") -- from the same or a different insurer.
Replacement value specifically refers to payment for a new piece of property on a like-for-like basis in the event of a total loss. It is commonly found in homeowner's and renter's property policies and may also be seen in commercial property policies. Replacement value, for example, would provide the funds to purchase a new, 2011 TV of a similar type to one that may be much older which was stolen or damaged beyond repair in a fire. What you couldn't do was have the insurance company pay the full cost for a 50" flat panel TV to replace a 25" color CRT TV. That's not like-for-like.
John is correct about replacement when it comes to auto insurance. Your policy would discuss ACTUAL CASH VALUE, which is replacement cost minus depreciation.[/u]
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