Have you ever looked at your homeowners, condo, or renters policy and saw that your property, belongings, and/or roof is listed as being insured for Replacement Cost Value (RCV) or Actual Cost Value (ACV)? Have you ever wondered what that means?
Replacement Cost (RCV) is the value to replace an item at today's cost.
Actual Cash Value (ACV) is the value for a similar item at today's cost minus depreciation (replacement cost minus depreciation).
What does this mean? Let's use an example most people have in their house - a couch. Four years ago when you moved into your house, you purchased a new sectional for $2500. Last month, your sectional couch was damaged in a covered claim.
RCV and ACV also affects how your roof is insured too. Some companies only offer RCV coverage for roofs if they were installed within the last 15 years, otherwise the roof is covered for ACV.
Here are some important things you can do:
Do you have a student heading off to college this year, and are wondering whether their personal belongings are insured under your homeowners insurance policy? The quick answer - it depends.
If your student is living in a dorm or on-campus housing, their personal property belongings are most likely covered under their parents' homeowners insurance policy. Please check with your agent to see if your policy covers a student living on-campus. Another thing to consider, is that many homeowners insurance policies limit the amount of insurance for off-premises belongings to 10 percent of the policies personal property coverage. This means that if a policy has coverage for $60,000 worth of insurance for belongings, only $6,000 coverage would be applicable to the belongings in a dorm room or on-campus residence. With most homeowners insurance policies, there is a limit for certain items such as computer and electronic equipment and jewelry. If the student has items that are above the standard limit on an insurance policy, these items should be scheduled separately as a Scheduled Personal Property (SPP) endorsement to their homeowners policy.
If your student is living off-campus, their belongings are most likely not covered under their parents' policy and should obtain their own renter's insurance policy to cover their belongings.
For students going off to college, the Insurance Information Institute recommends the following things:
If you have a student away at college and want to check if their belongings are covered, please contact your Alliance General Insurance agent at (515) 232-9271.