Choosing replacement cost coverage on your home’s contents is easy and could
be worth hundreds, even thousands of dollars to your family in the event of a
covered loss. Most homeowner insurance polices cover your personal property for
its actual cash value. You may prefer to cover your contents for the cost to
replace them, new for old, by requesting replacement cost contents coverage.
Some of the benefits to adding Cincinnati’s replacement cost contents
Losses on contents are paid at replacement cost not actual cash
value. Actual cash value is replacement cost less reasonable depreciation.
The actual cash value of your household property is what the items are worth at
the time of a covered loss. For example, a television set usually lasts about
10 years. If you own a five-year-old TV, about half of its life is used up.
While you would pay $800 to replace it with a new one, its actual cash value is
around $400. Homeowners insurance pays actual cash value (after the deductible)
for your damaged or stolen TV.
Replacement cost up to your full contents limit. Cincinnati’s
replacement cost contents coverage lets you recover costs up to the full amount
of your contents insurance following a covered loss. Other “replacement cost”
plans may limit your recovery to four times your damaged property’s actual cash
value. Your ten-year-old TV with an actual cash value of $100 would cost $800
to replace, and in this example you might get only $400. With Cincinnati’s
replacement cost contents coverage, you would get the full $800.