Renter's Insurance (part 3)

Replacement Cost vs Actual Cash Value

Most renters insurance policies are based on Replacement Cost Coverage. But, some are based on Actual Cash Value loss settlement.

Replacement cost coverage pays the cost to replace the damaged or destroyed item. For example, if you have a couch that you paid $1,000 for 2 years ago and it’s currently worth $400 used, it may cost $1,200 to replace. A replacement cost policy will pay you the $1,200 to replace the couch. An actual cash value policy will pay you the cost new, less depreciation. In this case, it may be $400 or even less.

Jewelry, Guns, and Antiques are usually handled differently. Check with your agent to be sure that you have the coverage you want. The time to have the discussion is before you need the coverage.

Coldwell Banker Koetje Real Estate and Koetje Property Management encourage you to talk to your insurance agent and make sure you have the proper coverage.

Contributed by:
Shelli Trumball
Cascade Insurance Agency