Blog Post: 3
Personal Property Coverage
Actual Cash Value vs. Replacement Cost
Andy Noel | January 22, 2019
Personal Property Coverage
A Homeowners Insurance Policy has multiple coverages built into the base policy. One of the most important being Personal Property Insurance (usually coverage C). Personal Property Insurance covers any Property the Insured owns not including the Dwelling or additional structures. In the event of a loss, Personal Property value is figured in one of two ways: Actual Cash Value (ACV) or Replacement Cost. Let’s take a look at each to help determine which is the best fit for you situation.
GET A QUOTE
Actual Cash Value
The Actual Cash Value of an item is figured by the cost of the item new minus the depreciation. For example let’s look at a TV, if you purchased a TV new 5 years ago for $1000 and it is destroyed in a covered loss and the adjuster determines, after depreciation, the TV is only worth $300 today, you would only receive $300 for the TV.
Replacement Cost
Replacement Cost of contents will pay to replace your property with a new item of like quality and kind in the current market. Now let’s look at that same TV example we used above. After a covered loss you are able to find a TV of like quality and kind for $600. Even though the adjuster determined the TV is only worth $300, you would receive $600 to purchase the new item. The Replacement Cost Contents endorsement on a Homeowners Insurance policy cost is minimal, but can have a huge impact on a the amount of money a client might receive in the event of a covered loss.
For more information on Personal Property Coverage or any other Homeowners Insurance coverages, contact one of our agents at Huston Insurance in Findlay, Ohio.
Huston Insurance