Homeowner’s Insurance: Replacing Personal Property


When people think about homeowner’s insurance, they generally believe that everything in their home is covered in their policy. However, there are different types of coverage which depend on which home insurance policy you choose. Shopping for the perfect homeowner’s insurance plan for your house is an important step you must take when you buy a home, and the types of coverage and sub-limits available can be overwhelming, especially for first-time home buyers. At Elite Insurance Solutions, our agents do your homeowner’s insurance shopping for you. We will consult with you to find out exactly what kind of coverage you and your family need and then find an affordable home insurance policy that fits those needs. Our agents will be sure to best protect your property and belongings in an emergency. We would like to tell you a bit more about the types of homeowner’s insurance coverages, the sub-limits for replacing personal belongings within policies, and other things you should know when deciding what would be the best homeowner’s insurance policy for you and your family.

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What are the different types of home insurance coverage?

You will have to decide between two levels of coverage in your homeowner’s insurance plan to replace your personal property if it is damaged, stolen, or destroyed: actual cash value or replacement cost, according to the San Francisco Gate newspaper’s Home Guides.

• Actual cash value means your insurance carrier will write you a check for the current value of your belongings, and not the actual price you originally paid. This type of coverage considers depreciation, a decrease in value due to age or wear and tear, when replacing your belongings.

• Replacement cost means you will receive the amount you need to replace the belongings at today’s prices. Most standard home insurance policies cover your personal belongings on an actual cash value basis; however, you can choose replacement cost coverage, but you will have to pay an extra premium.

Which type of coverage is better?

Let’s use an example of what would happen under each type of coverage if your television were stolen. You bought your TV set four years ago for $500. If you have actual cash value coverage, you would receive a check from your insurance company for the replacement cost minus the depreciation. In other words, you would receive the amount one would expect to pay for a four-year old television like your stolen one. If you have replacement cost coverage, you would receive a check from your insurance company for whatever amount it would cost to replace your original television with a brand-new TV set. As you can see, you get better coverage with the replacement cost level.

Which personal belongings are subject to sub-limits?

All insurance companies have determined that there are certain items frequently targeted by thieves, and they have placed sub-limits on these items and will only pay a pre-determined amount for items like:

  • money, coins, and gold – typical limit is $200
  • boats, trailers, jewelry, furs, watches, precious and semi-precious stones – typical limit is $1500 in case of theft
  • firearms – typical limit is $2500
  • silverware – typical limit is also $2500

Have more questions about the details of coverage for homeowner’s insurance? Contact Elite Insurance Solutions to ask our agents anything you need to know.



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