Insure Your Future

How Insurance Replaces Or Repairs Personal Property In Your Home

7 November 2022 by Sue Palmer

If you end up having to use your home insurance after a house fire, you likely know how your home insurance works by covering the structure of the home itself. However, you may have questions about how it works with your personal property in the home. Here is how personal property is typically repaired or replaced. 

Replacement Value Coverage

It is common for home insurance policies to have replacement value coverage. This means that your insurance will pay for what it costs to replace the damaged item with a similar item today. For example, if your TV was damaged in a house fire then it would not be expected for you to replace it with the exact model that you had before. Instead, you'll be allowed to replace it with a similar model that is available today. 

Depreciated Value Coverage

You do not have to replace everything in your home if you do not want to, as that will be quite wasteful. Instead, your insurance policy likely offers you the depreciated value for items that you will not be replacing. This allows you to get a portion of the money that you would get to replace the item with replacement value coverage.

Each insurance policy has its own rules for how items are depreciated. The value of a damaged item may be reduced by a specific percentage for each year old the item is. There may also be a maximum amount of depreciation per item. 

For example, if an item depreciates by 5 percent each year, and the item is 10 years old, then you would be given 50 percent of the item's value if you decide not to replace it. However, if the insurance policy only allows items to be depreciated up to 40 percent, then you would receive 60 percent of the item's value. Every insurance policy is different so make sure you know how it works. 

Repair Coverage

Ideally, the insurance company will want to repair an item when possible if it is damaged. This often means using an ozone treatment to remove odors from clothing and furniture, or professionally cleaning items to remove stains from soot. If an item is not able to be repaired, you would then get the option to replace the item or keep its depreciated value.

One thing to keep in mind is that some items simply cannot be repaired. This is often the case with items made out of plastic, which is a porous material that can retain a stain and odor. Reach out to a service like Binyon Agency to find out more.

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