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Aug 20

Is Replacement Cost on Contents worth it?

Personal PropertyLooking over your quote or policy may raise a question in your mind about whether or not you need to spend money for Replacement Cost on your Personal Property (also called Contents).  It’s a good question to ask, especially since you already have a large amount of coverage for your Personal Property listed in the main coverage section of your policy…so what’s the need for Replacement Cost?

Without the Personal Property Replacement Cost endorsement on a standard Home Insurance policy, your contents will only be covered at Actual Cash Value (also termed Depreciated value)…another way to view it would be to imagine what value you might get from a yard sale, craigslist, or on eBay.  Sure, the exact amount will differ somewhat, but without the Replacement Cost endorsement, instead of getting money for new stuff, you’ll get a significantly reduced amount, based on how long you’ve owned everything.  For example,

  • What value do you think will be placed on used electronics or appliances? A lot less than what you’ll need…
  • How much is a sofa worth after a few years? Not very much at all…
  • What do you think your clothes are worth after depreciation? Even less!

So, if your personal property is stolen, damaged in a fire or hurricane, or any other covered situation, when you want to replace it, you’ll definitely want to have enough money to go buy new stuff or else you’ll end up with a lot less than you had (or spend a bunch of your own money to get everything).

If you have questions on this coverage endorsement (or any insurance-related question), please don’t hesitate to call or e-mail us…