Should I pay a deductible when filing claims for damage to my belongings?
Should I pay a deductible when filing claims for damage to my belongings? It’s incredibly stressful when someone arrives home to find that all their belongings have been taken – the sofa, the TV, computers, stereo equipment. “Thieves have emptied the house, taking advantage of your absence.”
Fortunately, homeowner’s insurance includes a policy that covers personal belongings, such as clothing, appliances, furniture – anything inside your home, in your car, and some policies even cover belongings lost in a hotel you’ve booked.
Standard policies come with a coverage limit, which means if the limit is $100,000 and your loss due to theft or a fire exceeds $300,000, the company will only pay you $100,000, minus the deductible.
When you file a claim for the loss or damage of your personal belongings, which a police report should accompany, the insurance company will send an appraiser to assess the damage.
The insurance reimbursement depends on the type of policy you have. If your compensation is based on actual cash value (ACV), the insurer will pay you the cost of the damaged item minus depreciation. On the other hand, if it’s based on replacement cost value (RCV), the insurer will compensate you with an amount that allows you to purchase a new item of similar characteristics to the damaged or lost one.
In other words, if your policy provides compensation based on actual cash value, has a $500 deductible, and your TV was stolen, which cost $2,000 new a few years ago but is now worth $1,200 due to depreciation, you will receive $700 from the insurance company. If your policy is based on replacement cost value, using the same example, you will receive $1,500: the price of a new TV minus the $500 deductible. However, to obtain that $1,500, most insurers will require you to replace the damaged item. Initially, they may send you a check for only $700, the price of the depreciated item, and when you buy the new item to replace the damaged one and provide the invoices, they will then send you the rest of the money to reach $1,500.
It’s important to note that some insurance contracts exclude deductibles or apply lower deductibles for claims related to the loss or damage of personal property.
If you’re looking for affordable home insurance, call Univista Insurance. Should I pay a deductible when filing claims for damage to my belongings?