Nobody wants to think about a major catastrophe involving your home. Yet, knowing bad things happen from time to time regardless of where you live, insurance should protect you and yours when you need it the most.
Perils exist in all shapes and sizes. Windstorms, hail, lightning, flooding, fire, theft, vandalism, explosions - all of these can happen and do happen frequently in Texas. Whether a peril is listed (named) or is excluded (open), will determine the type of policy protection you have.
Knowing you have the proper coverage for your home is one key to peace of mind. But what about your personal property?
Two Types of Coverage for Personal Property
Depending on your policy, money paid to you to help restore the belongings that you lost because of a covered peril claim is determined by whether or not you have an actual cash value (ACV) or replacement cost value (RCV) in place.
When you bought that living room set several years ago, you may have paid a few thousand dollars for it then. However, a lot of sitting on that furniture has taken place along with normal wear and tear. With ACV coverage for your personal property, your insurance carrier is not going to reimburse you for the price you paid when you purchased the set if it is damaged/destroyed in a covered peril situation.
With RCV coverage in place, you would receive the amount you paid for the set several years ago, regardless of the current condition of the furniture. This allows you to purchase a set comparable to what you originally had.
The Price to Replace
Which one sounds like the better outcome? Certainly, if you purchased something years ago and would get reimbursement for the price you paid instead of a marked-down amount, you'd take that every time.
This doesn't happen for free. Expect to pay more in premium for RCV over ACV knowing you'll get the benefit in case you ever need to make a claim for personal property.
It's wise to make this decision not only from a value perspective, but from a volume perspective.
What are the things you may need to replace?
Doing an inventory of your home will help you list appliances, furniture, equipment, and even the little items like silverware, decorations, and jewelry.
For more expensive, high-value items, make sure to check with your insurance agent to find out how coverage pertains within your home insurance policy, or if a rider (supplemental insurance policy) needs to exist.
If you value what you currently have, the extra premium you may pay now to have a better shot at returning to normal with the proper purchasing power to replace those belongings is worth it.
Here to Help
Maybe you want to talk a bit more in depth about covering your personal property? As an independent insurance agency, we love talking great coverage for Texans and can help you regardless of where you call home in the Lone Star State. It helps that we have access to a marketplace with options.
Once you have that, it is hard to replace.
Give us a call or text. If you are in the Grapevine/Colleyville area, feel free to stop on by.
Stay covered, Texas.