Contents Insurance – Cash Value or Replacement Cost
Ask 10 people which coverage they have, and 5 will probably say they don?t know. If you are one of the latter, read your policy or call your insurance agent to determine whether you have cash value or replacement cost coverage. Payment from the insurance company will vary widely between the two.No matter what type of insurance you have, if you can provide a list and photographs (personal property inventory) of your belongings, you?ll receive a greater settlement than if you have no documentation to support your claim. In fact, the first thing you?ll need to do is create a list for the insurance adjuster, usually room-by-room, of everything that was damaged, destroyed or stolen, plus when it was purchased and what it cost.This information will be used to determine the amount of payment you?ll receive from your ins hr consultants urance provider.REPLACEMENT COSTIf you have replacement cost coverage, then you should have a favorable settlement when you file a claim. The insurance company will provide payment for the actual cost of purchasing a new, identical or similar item. They will REPLACE the item (once you provide them with a list itemizing your losses).One exception to this statement is if you reached the limit of your policy. For example, your policy has a limit on many categories of items. Most have a jewelry limit of between $1000 and $3000. If you have a theft of $5000 worth of jewelry, your payment would max out at $3000 unless you have a rider on your policy to cover the additional amount. Another exception would be if it costs less than the original purchase price to repair or replace the item. This is typical with electronics.