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Insurance Claims Frequently Asked Questions

What is Replacement Cost?

Replacement cost is the cost to repair or replace your damaged property or vehicle with an item of like, kind, and quality, without deduction for age, use, or obsolescence.

What is Actual Cash Value (ACV)?

Actual cash value is based on the cost to repair or replace the damaged item with an item of like, kind, and quality, minus any adjustments for things like age, use, or deterioration.

How is depreciation calculated?

The most common method of calculating depreciation is based on the life expectancy of the item, with adjustments made for the item's age and condition.

For example:
The typical life expectancy of a composition roof is 25 years which means that under normal conditions, the roof depreciates at a rate of 4% a year. A loss involving a 10 year old roof with typical wear and tear may be handled as such:

  • 10 years x 4% depreciation per year = 40% depreciation
  • The actual cash value of the roof is 60% of the repair or replacement amount (100% - 40% depreciation = 60%)

How will I be reimbursed?

Your policy may have Replacement Cost coverage on your home and/or personal property. If it does, full reimbursement may take place in the form of two or more payments. You will receive an initial payment corresponding with the claims representative's estimate. This initial payment may be for the full cost, or for the Actual Cash Value, of the repair. If the payment is for actual cash value, an "amount for recoverable depreciation" will be listed on the estimate. This amount can be claimed upon completion of the repair.

How do I apply for the recoverable depreciation?

To receive the recoverable depreciation, you must submit itemized receipts/invoices pertaining to the completed repairs. Farmers Union Insurance will pay the amount withheld or the difference between the initial payment and completed repair bill, whichever is less. Submit the invoice or receipt to your local claims representative. Make sure to include your claim number.

Are there deadlines I must meet to receive the recoverable depreciation?

Yes. You must notify your claims representative, in writing, of your intent to make a claim under the replacement cost provision within 180 days of the date of loss. The actual repair or replacement must then be completed by a specified date.

Why is my mortgage holder listed on your payment?

If a mortgage holder is listed on your policy, we are required to include the name on payments relating to that property.

If I suffer a water loss, what should I do?

Contact your agent or our 24/7 Call Center at 1-866-638-5677 to report your claim. Your agent or one of our claims representatives can assist you with finding a local water restoration company. The water restoration company can assist you in the damage mitigation process.

What actions should I take after a loss?

  • Protect your property from further damage or loss by making reasonable temporary repairs
  • Notify Farmers Union Insurance promptly by calling our toll free number 1-866-NFU-LOSS, or by contacting your Farmers Union Insurance Agent
  • Retain a record of repair costs
  • If theft or vandalism causes the loss, notify the police
  • If the loss is related to a bank electronic fund transfer or credit card, notify the financial institution

What do I need to document?

We always recommend:

  • Taking an inventory of your belongings
  • Keeping your records in a safe place like a safety deposit box
  • Video or photograph your property

What information do I need when reporting a claim?

Be ready to provide:

  • Your name and address
  • Names and addresses of witnesses or injured persons
  • General loss information
  • Your policy number

What Should I do after an Auto Loss or Accident?

  • Contact the police if the loss is due to an accident
  • Collect the loss information including: description of and specific damages to all vehicles, names and addresses of all individuals involved or witnesses to the loss
  • Contact Farmers Union Insurance with your loss/accident information
  • Be ready to provide your name and address, names and addresses of witnesses or injured persons, and general loss information
  • Have your auto policy number available
  • Promptly send Farmers Union Insurance of any letters, notices or legal papers you receive about the accident. You may be asked to submit proof of loss documentation. If you received treatment for injuries, you may be asked to submit that information as well

Will My Premium Increase if I File a Claim?

Depending on your policy, the length of time you've had Farmers Union Insurance and the laws and regulations in your state, your premium may not increase. We always recommend that you discuss any concerns you have with your agent

Do I Need to File a Claim against My Auto Policy if I was Not at Fault for an Accident?

Filing a claim against your policy could help protect you in case there are covered damages or injuries discovered later or if the other driver's insurance company fails to reimburse you for the damages. If you become involved in litigation because of a covered accident, your Farmers Union Insurance policy could help you by providing legal counsel

What's a Deductible?

The deductible is the portion of a covered loss you pay before the insurance company becomes responsible for payment under the policy. For example, if your covered claim is $2,000 and your applicable deductible is $500, you pay $500 and Farmers Union Insurance then pays the remaining amount of $1,500

Do I Need to File a Police Report for Loss or Theft?

It is always a good idea to file a police report when you experience damage or theft

Does Farmers Union Insurance Investigate for Possible Fraud?

We employ a special investigative unit to help identify and control claims that may involve fraud. If you suspect fraud, please contact your claims representative or call 1-800-347-1961, Ext. 2634

What are recycled parts?

Recycled parts are those that have been previously used and are salvaged from vehicles that are no longer in service. Recycled parts have long been used in the automobile repair industry. They are often more readily available than brand-new dealer distributed parts and less expensive. Using recycled parts is also an environmentally friendly, energy conserving alternative to brand new dealer distributed parts

What are Remanufactured parts?

Remanufactured parts are original equipment manufactured parts that have sustained minor cosmetic damage and have been repaired by a competent re-manufacturer. These parts look and perform equivalent to brand new OEM parts. Most re-manufacturers will warranty these parts for as long as you own your vehicle.

What are Non-original equipment manufacturer parts (non-OEM)?

Non-OEM parts, which are sometime referred to as after-market parts are those that are manufactured by someone other than the original equipment manufacturer (OEM). At Farmers Union Insurance we specify only CAPA or MQVP certified sheet metal parts on vehicles that are two model years or older. CAPA (Certified Automotive Parts Association) and MQVP (Manufacturers' Qualification and Validation Program) are organizations that test and certify the quality of non-OEM parts. The CAPA and MQVP certification is your assurance that the part is the functional equivalent to an OEM part and meets generally accepted industry standards for fit, finish and corrosion protection. These parts are backed by a warranty from the manufacturer that is often for as long as you own your vehicle

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