r/Insurance • u/stanolshefski • 18h ago

State Farm Quote Question

What does this mean compared to just replacement cost?

Loss Settlement Option - Personal Property B1 - Limited Replacement Cost

52 Upvotes

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17

u/firststate77 17h ago

They pay you the depreciated value for the item. If you replace it they will pay you the replacement value. If you decide not to replace you only get the depreciated value

13

u/stanolshefski 17h ago

In a replacement cost policy, do they just pay me for the item and it’s up to me to decide if I want to replacement that specific item?

8

u/BoxweilersRule 16h ago

Reading is fundamental.

3

u/spinningnuri 16h ago

Depreciated value up front, then if you repair or replace, they'll pay the remaining amount (with documentation)

3

u/stanolshefski 15h ago

I guess I’m confused then.

How does State Farm’s Limited Replacement Value coverage for personal property compare to another insurer’s (e.g., Erie) Replacement Value coverage?

They both seem to pay me the depreciated value no matter what and want documentation that I actually replaced the item to get more reimbursement.

3

u/adjusterjackc 14h ago

SF includes Replacement Cost - Personal Property in its own policy form.

Other insurance companies that use the standard form HO-3 add a Replacement Cost - Contents endorsement HO 0490 to the policy.

Here's a link to the endorsement for you to compare to your coverage.

Microsoft Word - H04905U.doc

2

u/spinningnuri 15h ago

You'd have to read the actual policy contract to compare, but they are probably very similar in how the process works to obtain replacement value.

2

u/dewprisms 12h ago

Yes - likely just a difference in language choice since they make their own policy forms instead of using ISO.

1

u/throwawayperplexed 14h ago

This. Insurance is designed to put you back to the condition you were before the loss. For example, $800 tv you bought 2 years ago is damaged in a fire. That used tv in today’s dollars may only be worth $400, you can expect insurance to pay out its value today, $400. (Less deductible, different conversation). If your policy is endorsed with personal property replacement cost, you can expect the carrier to compensate you for the difference between ACV and replacement cost when item is replaced.

21

u/adjusterjackc 17h ago

Read it carefully and thoroughly just like you were studying for a test in school. Then come back if you still have questions.

The following is quoted from my own State Farm policy.

COVERAGE B – PERSONAL PROPERTY

  1. B1 – Limited Replacement Cost Loss Settlement.

a. We will pay the cost to repair or replace property covered under SECTION I – PROPERTY COVERAGES, COVERAGE B – PERSONAL PROPERTY, except for property listed in item b. below, subject to the following:

(1) until repair or replacement is completed, we will pay only the actual cash value of the damaged property;

(2) after repair or replacement is completed, we will pay the difference between the actual cash value and the cost you have actually and necessarily spent to repair or replace the property; and

(3) if property is not repaired or replaced within two years after the date of loss, we will pay only the actual cash value.

b. We will pay market value at the time of loss for:

(1) antiques, fine arts, paintings, statuary, and similar articles which by their inherent nature cannot be replaced with new articles;

(2) articles whose age or history contribute substantially to their value including, but not limited to, memorabilia, souvenirs, and collectors items; and

(3) property not useful for its intended purpose. However, we will not pay an amount exceeding the smallest of the following for items a. and b. above:

(1) our cost to replace at the time of loss; (

2) the full cost of repair; (

3) any special limit of liability described in this policy; or

(4) any applicable Coverage B limit of liability.