Auto Insurance AUTO

Auto insurance protects you against financial loss if you have an accident.

Read More
Homeowners Insurance HOME

A standard policy insures the home itself and the things you keep in it.

Read More
Business Insurance BUSINESS

Discover the perfect insurance options to meet your specific and unique needs.

Read More
Contractors Insurance CONTRACTOR

Browse a variety of insurance options in order to find the right one for you.

Read More
Medicare Insurance MEDICARE

Learn about different medicare coverage to fit your specific needs.

Read More
Travel Insurance TRAVEL

Finding insurance doesn't have to be difficult. We do the work for you.

Read More

As you choose your options for insuring valuables, consider both replacement cost and actual cash value coverage. Both options can offer some coverage to your belongings. However, the type of coverage matters significantly. When selecting home insurance to cover these items, you need to consider these details very carefully. They play a role in determining what you can expect overall. Here is a closer look.

What Is Replacement Cost?
Many insurance companies allow you to select from replacement cost insurance and actual cash value. If you have an item with a high value, you want to be sure you get as much from the insurance company as possible to allow you to replace this item. That generally comes with replacement cost coverage.

For example, you may have a high-valued piece of jewelry. You have it appraised. You know the cost to replace it. If someone steals it, you want the company to pay you enough so you can replace that item with a new one. With this coverage, that can generally happen.

However, replacing an item tends to cost significantly more. With items that are rare, replacing them can even be a challenge. As a result, you may need more money to do so. Therefore, it might not hurt to take out more coverage than the worth of the item. However, realize that replacement value coverage might increase your premium costs.

What Is Actual Cash Value
Another option is actual cash value coverage. It pays you based on the current value of the item. It does not take into account the cost to replace it.

For example, in the above incident, the piece of jewelry may have a simple stone and gold. The policy pays out what this is worth. It does not take factors such as the rarity of the item into consideration. Keep in mind, at times items may depreciate. Therefore, you may not receive a full sum to replace the item with a similar one.

Which One Is Right for You?
For antiques, this can be a limiting situation. If the age and the uniqueness of the item are key factors in its worth, you may lose money with actual cash value. On the other hand, replacement cost coverage can help you. It can provide a higher value to you in some situations.

You will always want to have your pieces inspected and appraised. Keep the receipts and know the value of them. Update this annually. Be sure your home insurance reflects the value of the item in the most appropriate way.

Your home insurance should list these items in a specific rider. Be sure to specifically cover these items to protect them long-term. Otherwise, a theft or fire could cause you to lose a significant amount of value in your items.

Posted 8:08 AM

Share |


No Comments


Post a Comment
Name
Required
E-Mail
Required (Not Displayed)
Comment
Required


All comments are moderated and stripped of HTML.
Submission Validation
Required
CAPTCHA
Change the CAPTCHA codeSpeak the CAPTCHA code
 
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive


View Mobile Version
Facebook
LinkedIn
YouTube
Twitter
Pinterest
Instagram
Share Kindness
© Copyright. All rights reserved.
Powered by Insurance Website Builder