Advanced English Dialogue for Business – Full replacement coverage

Listen to a Business English Dialogue About Full replacement coverage

Mariah: Hi Eva, have you heard about full replacement coverage in insurance?

Eva: No, I haven’t. What does it mean?

Mariah: Full replacement coverage is an insurance policy that pays to replace damaged or destroyed property with new items of similar kind and quality, regardless of depreciation.

Eva: Oh, so it’s like getting brand new items to replace what was lost or damaged?

Mariah: Exactly. It ensures that policyholders can recover the full value of their property without having to cover the depreciation costs themselves.

Eva: Are there any limitations to full replacement coverage?

Mariah: Some policies may have limits on coverage amounts or specific exclusions for certain types of property.

Eva: How do insurance companies determine the value of the replacement items?

Mariah: They typically assess the current market value of similar items to determine the replacement cost.

Eva: Can full replacement coverage be more expensive than other types of insurance?

Mariah: Yes, because it provides more comprehensive coverage, full replacement coverage may have higher premiums compared to policies with actual cash value coverage.

Eva: What happens if the replacement cost exceeds the coverage limit?

Mariah: In that case, the policyholder may have to cover the difference out of pocket unless they have additional coverage or endorsements.

Eva: Thanks for explaining, Mariah. Full replacement coverage sounds like a valuable option for protecting property.

Mariah: No problem, Eva. It’s important to understand your insurance coverage to ensure you’re adequately protected in case of loss or damage.