My husband drove through the front of the garage damaging a Cannondale road bike $3,750 worth of damage to the bicycle.

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jan 6, 2014

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Insurance Question from Waughtown, NC

Asked on 01/06/2014

My husband drove through the front of the garage damaging a Cannondale road bike $3,750 worth of damage to the bicycle. The insurance company wants US to purchase a new bicycle for this price and reimburse us 20% of the value. Is this normal?

Answer given on January 07, 2014

When there is a homeowner claim for personal property, the normal policy provides replacement cost coverage on the item.Some insurance companies will pay a certain percentage, known as actual cash value, until the item is actually replaced. Then they will pay the difference between what they had already paid and the actual replacement cost. The item purchased must be the same or similar to the item damaged or destroyed.There may be some insurance policies that limit coverage for items such as bicycles, but that is usually for theft if there is any limitation. You should talk to the adjuster and see if maybe they meant they would pay 20% until the item is actually replaced. If not, ask why it is not covered on a replacement cost basis. If you still have no explanation of the settlement offer, ask for a supervisor to see if maybe the adjuster is mistaken as to the coverage provided by your homeowner policy. It could be an independent adjuster who is not aware of the coverages provided by your policy. You should also refer to your policy to see if there are any limitations to items such as a bicycle.

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