When picking out a homeowners or renters policy there are lots of things to consider. Things like: Is the company insuring you a quality company? How much of a deductible do you want to carry? And something that people do not often consider: Do you want full value replacement or depreciated replacement cost?
This might not seem like a big difference but it will if you have a claim.
Depreciated Replacement Cost is a payment on an object for what it is worth today. Your giant TV might have cost $800 a few years ago but today it might be worth only $300. This is depreciated replacement cost.
Full value replacement cost is a payment based on what it would take to buy a new equivalent object today. For example: Your giant TV cost you $800 a few years ago. On the claim the insurance company may give you $800 because it would cost that much to buy an equivalent TV today.
Do you know which your policy has? If not check with your agent today to make sure you are properly covered!
This might not seem like a big difference but it will if you have a claim.
Depreciated Replacement Cost is a payment on an object for what it is worth today. Your giant TV might have cost $800 a few years ago but today it might be worth only $300. This is depreciated replacement cost.
Full value replacement cost is a payment based on what it would take to buy a new equivalent object today. For example: Your giant TV cost you $800 a few years ago. On the claim the insurance company may give you $800 because it would cost that much to buy an equivalent TV today.
Do you know which your policy has? If not check with your agent today to make sure you are properly covered!
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