Contents insurance, also referred to as personal property, protects personal items that are stolen or destroyed by perils covered by an insurance company. Personal property coverage also includes items that are not stored inside the home.

Expensive items like jewelry and collectibles are covered, but there are usually dollar limits if they are stolen. Items count as personal property if they are not attached to the house, with the exception of motor vehicles. Personal property includes, but is not limited to:

  • Furniture
  • Clothing
  • Electronics
  • Appliances
  • Artwork
  • Decor
  • Dishes
  • Tools
  • Refrigerator and pantry contents
  • Sporting goods and toys

Actual Cash Value vs Replacement Cost Value

Insurance companies will pay for personal property based on the type of coverage selected. Homeowner’s can select to have their property replaced at actual cash value or replacement value. replacement value and cash value.

Actual cash value is the replacement value of the property minus depreciation. Standard homeowner policies pay you for the actual cash value (ACV) of your possessions after they are destroyed. For example, you may have paid $1,500 for a new dryer five years ago but today it may only be valued at $1,500 due to depreciation. With actual cash value, you would only get the $1,500 for the dryer from the insurance company.

Replacement value is the cost to replace the property with property of equal or comparable value. If you want to be fully insured, you’ll want to make your policy a replacement cost value (RCV) policy. Replacement cost value means you are getting the exact amount to replace the same object for current market price. If that TV was $3,000 then, you will get $3,000 to replace it. This may also cost more than the ACV version.

Premiums for replacement value policies tend to be higher because the settlement amount received from the insurance carrier is higher.

Do you need more information about homeowner’s insurance? Our agents and customer service representatives are here to help. Call us today at 1-888-949-6289 or visit your nearest Insurance Navy location. For your convenience, Insurance Navy is open from 8 a.m. to 9 p.m. CST, 7 days a week.

*Please review your own policy carefully for details on homeowners insurance. Homeowner’s insurance varies by insurance company and policy.