Insurance Agent License Washington State

A Sneak Peek inside the Property Insurance Course (Part 2):


Our main goal at Slater All Lines Insurance School is to teach our students the information they need to pass the Washington State Insurance Producer Exam. This is Part 2 of our new Insurance Exam Sneak Peak series. We want to provide students with an inside look at some of the topics covered in our Insurance Exam Classes.

How are loss settlements determined by insurance companies?

  • Actual Cash Value (ACV) means the cost of repairing the damage, minus reasonable depreciation (wear and tear, deterioration and obsolescence).
  • Replacement Cost (RC) means the current cost, at the time of loss, to repair or replace the damaged property with new materials of like kind and quality, without deduction for depreciation, but not more than the policy limit.
  • Stated Value Coverage, a.k.a. Agreed Value…..Property is insured for a set value. The value is determined on the policy date, not at the time of the loss. This is usually accomplished by scheduling a particular item on the policy.
  • (Fair) Market Value is a concept which does not usually apply to insurance settlements. Market value means the selling value of the property. The (fair) market value on real property would not be a good indicator of the insurable value for fire insurance.    In a down market, a home might sell for less than it cost to be rebuilt.
  • Salvage Value…. The Salvage Clause is a condition in a property policy that gives the insurance company the right to take title to property after payment of a total loss. Salvage Value is often referred to as the value of damaged property taken over by an insurer to reduce its loss. The insurance company will sell the damaged property. Most insurance companies will offer the insured an option to purchase the salvage back from the insurer for what the insurance company might receive from a salvage yard.