There are
two basic ways to insure your personal
belongings:
- REPLACEMENT COST
COVERAGE - Insurance that pays the dollar
amount needed to replace damaged personal
property with items of like kind or
quality without deduction for
depreciation.
- ACTUAL CASH VALUE -
Insurance under which the policyholder
receives an amount equal to the
replacement value of damaged property
minus depreciation. Unless a homeowners
policy specifies that property is covered
for its replacement value, the coverage
is for actual
cash value.
In either case, you'll want
to make sure to do a home inventory and include
any items of special value such as jewelry or
artwork. Some items require special riders or
their own policy to ensure coverage.
If you're renting, remember
that your landlord's policy covers only the
building itself. Your property isn't covered in
the event of a loss.
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