A standard homeowner’s policy covers personal property, but only on an actual cash-value basis and for only the perils named in the policy. Two coverages offered by some carriers can provide additional protection for your home and make it easier for you to recover from a loss. Not only do these coverages add key enhancements to the policy, they add great value, costing just an additional small percentage of the premium.
Personal property replacement cost coverage provides replacement of a lost or damaged item with an identical item or a comparable item with no deduction for depreciation. Because electronics and other items can depreciate quickly, this coverage can greatly benefit homeowners needing to purchase replacements. For example, without this coverage, the loss of an older television would only be compensated for the actual cash value of the television, which would be only a fraction of the cost of a new device due to depreciation. With this coverage, the you would be better protected and returned to a pre-loss condition more quickly, greatly improving your experience with your insurance carrier.
Special personal property coverage means all personal property losses are covered, unless specifically excluded in the policy. For example, a diamond bracelet goes missing. Under the standard homeowners policy, this would not be covered unless it is actually the result of a theft. With special personal property, mysterious disappearance is not excluded and as such the loss would be covered. This optional coverage also creates consistency with respect to the adjustment of claims because both personal property and the dwelling are covered on the same all-perils basis.
Note: All coverage is subject to provisions, exclusions, conditions and limitations of the applicable insurance policy.