Like car theft, many cities and communities throughout the United States have seen an increase in home burglaries. If your home is ever burglarized, it is important to understand your home or renter’s insurance coverage.
Home insurance can provide you with coverage for replacement if you have valuables stolen from your home. In insurance terms, this is known as personal property coverage. Coverage varies depending on your policy limits and your deductible.
A Claim is Processed on Actual Cash Value or Replacement Value for Stolen Valuables
It is important to note that covered claims are processed based off your policy verbiage. Often policy holders believe valuables that were stolen from their home will be reimbursed at the same price as what they paid for it. This is not always the case.
Actual Cash Value – Actual cash value is the amount you paid for the item, minus depreciation at the time of your insurance claim. The insurance carrier reimburses you simply off what this specific item costs today. In most situations, insurance adjusters will determine the price of reimbursement is less than what you originally paid. Depreciation is broken down by wear and tear or the age of the item.
Replacement Value – Replacement value is the amount you paid for the item. It does not factor in depreciation. In a covered claim, an insurance adjuster will reimburse or replace an item similar to what was stolen at today’s price.
Choosing what coverage, you prefer for your policy is up to you. Actual cash value coverage tends to offer a more affordable insurance premium but does offer a little less coverage. Replacement value offers more coverage but increases your insurance premium.
Are all items in your home covered under personal property coverage?
Certain high price items should be covered under a policy rider.
This is separate from personal property coverage. Items such as wedding or engagement rings, other valuable jewelry, fine art, as well as equipment such as high price cameras, bicycles, musical instruments, firearms, or any other valuables you consider high price.
Contact an agent in our office to discuss if you need specific items in your home on a policy rider. It’s important to have separate coverage for these items because home insurance policies do have policy limits. If a high price valuable was stolen from your home, you may be underinsured. Therefore, your home or renters insurance policy could not provide you with proper replacement for your valuable.