Do me a favor and find your Homeowner Insurance declaration pages. Look at your Contents limit, also known as Personal Property. Now, look under Endorsements (Additional coverages) and make sure that you see Personal Property Replacement Cost. If you see that, fantastic! If you do not, call your agent now!
When I have been requoting clients from other agencies, I have come across this problem all too often. Perhaps your realtor gave you a quote from an agency that they do business with, and although it’s awesome that they were trying to help you, they do not specialize in insurance and may not have an understanding of what they are looking at.
Unfortunately, there are insurance agents that offer the lowest premium to keep getting these referrals, even though they are excluding coverages to get it that way. Think of it this way, if you are offered chocolate chip cookies, which would you choose? Just a few chocolate morsels, chocolate with every bite or double chocolate chip? What good is a chocolate chip cookie with only a few specks of chocolate?!?
Here are a few ‘real life’ examples ~
A friend of mine is an adjuster for a major national insurer. While working claims for the fires in California, she has come across A LOT of people that have Actual Cash Value (ACV) on their contents. So, instead of being able to pay them to replace their items with the same “like, kind and quality”, she must pay them the depreciated cost. Think “garage sales prices” on replacing ALL the furniture in your house.
Then there is the neighbor of a friend that went through the agency that their realtor referred to them with a low premium. But, when their house caught on fire, they realized why the premium was so low; it did not include Personal Property Replacement Cost. Instead of being given $100,000 to replace all their possessions, they are having to work with $50,000. While that still sounds pretty good, have you priced furniture lately? Imagine your 3-bedroom house along with your clothing and the tools in your garage. The pricing for BRAND NEW is a lot different when you are looking at everything.
Best example that I use quite often on WHY you should have Personal Property Replacement Cost… When Hurricane Ivan came through on September 16th, 2004, a small tornado hit my friend’s house. Although the damage outside looked minimal with a few rows of vinyl siding removed, water from the rain soaked through and got in to the ceiling. Too much water accumulation and BAM! The ceiling fan along with a lot of the living room ceiling (drywall) came crashing down. The furniture was destroyed! They had had this furniture for about 10 years and it had been hand me downs then. Although the furniture was excellent quality, it was still almost 20 years old. The Actual Cash Value (depreciated) might have been a few hundred dollars for a full-size couch, love seat, coffee table and end table. Luckily, they had Personal Property Replacement Cost, so they were paid $3,000 to replace their living room furniture and over $14,000 total.
I’m working on a quote right now that has $117,000 of Personal Property. I only write it with Replacement Cost, but for giggles I looked at the savings for ACV. Yearly premium is $1,255 with RC and $1,109 ACV, a savings of $146 a year. Is $12 a month really worth it? I think not.
Now, go check your policy and look at your coverages. Remember, at Niceville Insurance, we are here to give you a policy that covers you for what you need, when you need it.
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