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Know the Difference Between Actual Cash and Replacement Cost Value

learn the difference between these personal property coverage options

Know the Difference Between Actual Cash and Replacement Cost Value

Learn about the difference between actual cash and replacement cost value and how it affects your homeowners insurance.

When you are trying to get the right homeowners insurance in Orange, California, there are a lot of important coverage decisions that you will have to make.  For instance, you might have to choose between actual cash and replacement cost value coverage for your personal property.  But what does each option entail?  Here’s what differentiates these two personal property coverage options.

Actual Cash

When you choose an actual cash coverage option, your insurer will offer coverage for your personal property based on the item’s value, minus depreciation.  Because this coverage option takes depreciation into account, it offers less coverage than its replacement cost value counterpart.  While this means that these policies are generally a little bit cheaper, it also means that these policies will not offer you enough coverage to actually replace a damaged or stolen item.

Replacement Cost Value

In comparison, replacement cost value policies offer full coverage for your personal property.  These policies do not take an item’s depreciation into account when determining coverage values.  In fact, replacement cost values are generally set and agreed upon by all parties before a homeowners insurance policy is finalized.  As these policies offer comprehensive coverage, they tend to be on the more expensive side.  However, if you are trying to cover high-value items such as jewelry, fine art, antiques, electronics, family heirlooms, etc., then getting this kind of coverage is highly advised.

This is what you need to know about the difference between actual cash and replacement cost value coverage.  Do you have further questions regarding your homeowners insurance in Orange, California?  Then don’t hesitate to contact the experts at Remland Insurance.  We are ready to assist you with all your coverage needs today.


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