Replacement Cost Coverage for your Personal Property is recommended in your Homeowners coverage.
This will ensure that your Personal Property- the contents in your home such as furniture, TV and Entertainment systems, home furnishings, personal effects, etc.- will be insured to ‘replace’ the items without the depreciation factored in.
Most Homeowners Insurance Companies provide for this Replacement Cost coverage for personal belongings, which pays the cost to replace items, without considering depreciation, up to your policy limits.
With the rising costs of Homeowners Insurance in the state of Florida, many customers seeking Homeowners Insurance policies might be tempted to save money on their premiums by opting for the Actual Cash Value (or ACV) for their Personal Property coverage.
This can be a double-edged sword, as Yes, you will save money now when your premium is calculated, but you will not receive full Replacement value for your Personal Property in the event of a loss event claim.
ACV accounts for depreciation of your items, therefore that high dollar LCD/Plasma/3D TV would be depreciated when the claims adjuster is working on your reimbursement at the time of a loss.
For instance, a $1,500 TV might only be valued at a few hundred dollars as it will be depreciated for age under the ACV policy language.
Having already gone through the trauma of a Fire or Windstorm loss to then find out that your ACV coverage will pay you ‘pennies on the dollar’ makes an already painful situation even worse.
For this reason, Triton Insurance (and myself) always recommend the Replacement Cost option when choosing your Homeowners Coverage C – the Homeowners section – Insurance.
Give me an email at firstname.lastname@example.org for more detailed information concerning ACV vs. RC on your Homeowners Policy.