Replacement cost coverage for personal – A home insurance policy is a package of policies for the average homeowner that provides coverage for multiple things, primarily homeowners’ coverage, coverage for personal property owned by the insured (also known as ‘contents’), and personal liability coverage. With regard to the insured. Within a homeowners insurance policy there is a form of coverage called “Personal Property Coverage,” which generally appears on your ads page as coverage c. Covered for items considered “personal property” – things like clothing, furniture, household items, electronics, and non-permanently installed appliances, to name a few. How these items are valued at the time of a covered claim is where the replacement cost savings begin. Unless expressly stated in your policy, coverage for these items is assessed based on the “actual monetary value” at the time of the loss (in other words, the amortized value). But for an additional cost, your insurance policy can be certified so that these items are valued on a “replacement cost” basis (in other words, the cost of replacing the item with a new, similar item). This has no effect on the actual coverage limit specified, but rather the amount that will be reimbursed for each individual item based on how the items are valued.
So why am I really talking about this? Well, this “replacement cost” endorsement can be expensive and most people don’t really know about it. They don’t know what it covers, how much it costs them to get, and they don’t know they can remove it if they want to. In a recent quote I completed for a new customer, its price was reduced by more than 22% by removing only this endorsement.
Personally, I always recommend quotes that include this endorsement, because I believe in its importance, but at the end of the day you are the homeowner and you are the one buying the home insurance, so you have to make that decision.
If you think you’re paying too much for homeowners insurance and don’t feel like your agent really gives you all the options, ask us for a quote. While we recommend that you purchase the best coverage available, we also understand that you may be looking for creative ways to save on home insurance premiums on your home in Florida, and one of those ways is to reduce coverage in some way. That’s where Evolve comes in – we can give you options!
FAQ (Frequently Asked Questions)
How do I find out if I currently have this coverage in my homeowners insurance? This will be noted somewhere on your Announcements page only if you have it in your document. In most cases, it is a separate item under the main coverage. If you are not sure, contact your current provider and ask.
If I remove this endorsement from my homeowners insurance, will my home also be covered at the actual cash value? No, removing this endorsement will not change the way the home is covered under your policy. The home will be covered under the provisions set forth in your policy terms, but for homes built on the site, a standard homeowner’s insurance policy issued under Form HO3 will provide coverage for the home based on the replacement cost. This is just a general rule – some companies may add additional restrictions on top of this, so it is best to contact your current insurance company for information on how to enforce your policy.
I have a mortgage Will I be able to remove this coverage while still meeting your insurance requirements? Yes! Your lender is only interested in securing what you are interested in, and that is the building itself. They have absolutely no dispute with the personal property coverage department or about how you choose to insure it.