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Replacement Cost Coverage for your Homeowner’s Contents

06.10.16

Actual Cash Value Vs. Replacement Cost Coverage

Your homeowner’s policy provides protection for your dwelling which is also known as your structure. The Other major coverage or protection that your homeowner’s policy provides is your contents coverage. This is all of your personal belongings, furnishings and other things inside your home.

Should you have a claim the insurance company will gauge your covered loss in one or two ways, either by Actual Cash Value {ACV} or Replacement Cost.

The Difference:
An actual cash value claim does take and will calculate a deduction for deprecation. A Replacement Cost Contents endorsement on your homeowner’s coverage will not take depreciation. So the cost to replace that new sofa, table, television, furniture or other items damaged by a covered loss, will be fully replaced up to your policy limit. It does not matter if it was bought yesterday or a few years ago. You will be able to replace your covered items with a new same like kind and quality item.

While there is a small expense to add Replacement Cost Coverage to your contents, the additional protection could and will be be important at the time of a loss. Remember the only difference between actual cash value and replacement cost will be the deduction for deprecation. Both are based on what it would cost to replace the damage item or items at today’s cost or value.

Please give your Allan M. Walker account manager a call for more information and what the actual cost would be to add Replacement Cost Contents to your homeowner’s policy today.

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