Is Your Personal Property Insured For Replacement Value?

by Anna Glendenning | More from this Blogger

28 Mar 2006 03:33 PM

The relationship you have with your insurance company is mutual. The insurance company promises they will help you in the event you suffer a covered loss and you promise to pay your premiums and read your policy and understand what to do if you suffer a loss. So far we have talked about reviewing your policy and making note of any limits, exclusions or conditions that might apply to you or the personal property you own and we have talked about the fact you need to have some kind of record of the personal property you own along with some evidence of the value for your personal property.

Now, you need to get down to business and make sure your insurance will do what you expect it to do if you suffer a covered loss. The most important thing you want to do is verify that your homeowner insurance policy is covering your personal property for "Replacement Value" and not just the actual cash value of your personal property. The difference can be huge if you suffer a loss.

For example, if the TV you purchased in 2003 is stolen and you have an actual cash value policy, you will be insured for the value of a 2003 TV, which will not be the same value as it's going to cost to get a new 2006 TV. If your policy insures for replacement cost your insurance company will cover a new TV to replace the stolen one, if your insurance policy covers the actual cash value you will be given a check for the 2003 TV minus the depreciation for the three years you watched the stolen TV. It is important to verify that your personal property coverage is replacement value, most companies now offer this automatically, however some don't so be sure to check. The additional premiums are worth the added value in the event of a covered loss.

The next Blog will discuss how to make a secure and valid record of your personal property before you suffer a covered loss, and how to make sure your insurance agent provides you with the most complete coverage on the property you own.

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Related Blogs:

• Household Inventory--Getting Started.
• Household Inventory--At Least Make A List.
• Is Your Personal Property Insured For Replacement Value?
• Insurance Appraisals

Glossary of Insurance Terms:

A | B | C | D | E | F | G | H | I | J-K | L | M | N | O | P | Q-R | S | T | U-V | W-Z

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Learn more about Anna Glendenning

Anna Glendenning is a mother of four. Two biological children grown and out of college, and two siblings and adopted together in 2003. Anna's Personal Website http://www.adoptiveparentsnetwork.

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