With FL Home Insurance you have options when it comes to how you want to insure your personal property (your “stuff”). And just like everything else, you can go the economical route or you can shell out a few more dollars and get the fully loaded version.
The terms “Replacement Cost” and “Actual Cash value” or ACV are loss valuation methods FL Home Insurance companies use to determine how much money they will pay out in the event of a loss from a peril (claim).
First you need to know what is considered personal property. On FL Home Insurance personal property (aka contents) would be things like your TV, computer, furniture, appliances, clothing, dishes, jewelry, etc … generally anything not physically connected to the home, or how I was taught by a good friend when I became an agent “anything that would fall out if you flipped the home upside and shook it”.
If you have Replacement Cost coverage, the insurance company would replace the lost items, meaning, they would provide you with a new TV, Computer, etc … at today’s prices without deduction for depreciation. With Replacement Cost coverage, your FL Insured personal property items are usually covered for what it costs to buy them again at the time of the claim as new. Premiums for this type of insurance are typically higher than the Actual Cash Value insurance coverage option.
If you have Actual Cash Value coverage, the insurance company will deduct depreciation from your personal property’s total value prior to reaching a payout figure (so you’d get a smaller pay out with ACV verses Replacement Cost). What you receive as payout will likely be less than it costs to replace the items lost. With Actual Cash Value FL Home Insurance, your personal property is typically covered for what you might expect to get if you sold it at fair market value – possibly at a garage sale, online auction site or other sales event – as replacement cost minus depreciation. This coverage option may allow for the insured item to be replaced with a used item but not usually a new one. Premiums for Actual Cash Value insurance coverage though generally cost less than those for the Replacement Cost coverage option.
Utilizing an Actual Cash Value policy will save you money on your premium, but you will need to evaluate the added cost of replacing the items in the event of a loss/claim when making that decision.
At Culbertson Agency, we don’t think that there should be a “one-size-fits-all” approach when it comes to FL Home insurance, and while we do recommend Replacement Cost for the majority of the time, we also recommend Actual Cash Value as a viable option in the right situation and after discussing and weighing the pros and cons with our customers.
If you would like to learn more please contact our agency at (239) 210-7700 for additional information or contact us via our website.