Please allow me to digress briefly from discussing the design of my ultimate nerd cave. This morning I was writing a post about setting up the room as my go-to-spot for reading when something occurred to me. I talk a bit about replacing my lost books by spending a lot of time and a fair amount of money on Amazon.com. If you didn’t know me, you might think I’m rolling in money and flaunting it on a blog like some kind of jerk. But that’s not the case.
And while I’m at it, let me say this—I don’t relish, enjoy, or in any way embrace the role of victim. At this point, if you’ve read my first few posts, you know my family lost our home, two much loved cats, and most of our possessions in a house fire in the summer of 2011. If you find me playing the “fire card” now and then, I promise you it’s only to provide a context to whatever I’m talking about. ‘Nuff said.
Getting back to my original point, there’s an important fact about insurance that many people don’t realize. Just because you might be insured for $200,000 on the contents of your home doesn’t mean you’re getting a check for $200,000 a few weeks after your house is destroyed. As Bart Simpson would say, “au contraire mon frère.” Let me attempt to explain the insurance concept known as “replacement value.” I ain’t claiming it’s exciting but it’s probably something you should understand if you have homeowner’s or renter’s insurance.
Suppose I lost a 42” Sony LCD TV that I purchased 5 years ago for $900. The insurance company’s actuary decides that the TV depreciated 50% since I bought it. Today, a new Sony 42” LCD TV might cost me $500.00 and the insurance company agrees with that estimate. When I get a settlement check for all the contents I claim as lost in the fire, the total amount will only include $250 for the T.V. (based on the 50% depreciation). BUT, when I go out and purchase a new T.V. (any size or type my little heart desires), I then submit my receipt/invoice to the insurance company. As long as I paid $500 (or more) for the new T.V., a few weeks later I will get a reimbursement check for the remaining $250.00. And oh yeah, I have exactly two years from the date of my loss to get that done.
You might wonder, as I did, wouldn’t it be easier for all parties if the insurer just cut a check for the full amount of coverage and let everybody go on with their bad selves? Well, it’d be easier, but it’d also encourage a bunch of dishonest & unscrupulous scumbags to start burning down their houses (perhaps filled with worthless crap) so they could get a nice payday.
What it boils down to is I have to spend money to make money. If I want to be fully reimbursed for the loss of my books, (and also actually replace them) then I need to get about the business of buying books. So, Hi Ho, Hi Ho, it’s off to Amazon.com I go.
The entire point of insurance is to make you whole. If you want to take the first settlement check and go live in a box in the woods, nobody will stop you. But personally, I prefer get back to the point where it seems (if I may borrow the slogan of a certain disaster clean-up company) “like it never happened.”
Next time—The Three R’s: Reading, Reading, and even more Reading