Should I Insure For Replacement Cost On My Tucson, AZ Renters Insurance?

A common question that we receive is whether you should insure for replacement cost.  Your Tucson, AZ renters insurance will cover your personal property either way, but it’s a question of how it’s valued.  The person who most recently asked the question had some additional twists to the question, as well, so let’s take a look.

When you buy Tucson Renters Insurance, do you need replacement cost coverage?  Absolutely.  While companies will sell you an actual cash value policy if you ask them very nicely, let’s look at this in practical terms.  Your living room set is five years old.  You bought it for, say, $2,000 at a big box furniture store, new, five years ago.  What’s that worth today?  More correctly, what’s the actual cash value of it today?  We looked at the local Craigslist and found a sofa, “great deal” for $75.00.  That’s the most expensive part of the set, so even a large set is probably less than $300 ACV.

That’s what you’d get if you had an actual cash value policy.  But the resident in this case has another wrench to throw into the works.  Turns out they have some expensive collectibles of unspecified type.  These would never be covered at replacement cost under a renters insurance policy in Tucson, so they’d need an endorsement or a separate floater policy.  Depending on the type and value, they’d also need to be appraised.

The insured in question was also concerned about earthquakes, which are a small but non-zero risk in the area.  To get coverage for earthquakes, you’d have to have an endorsement as well.  This endorsement would bring with it the replacement cost or ACV of the policy itself.  That coverage generally comes with a deductible based on percentage of the loss, rather than a flat deductible amount.  That’s definitely something to be aware of.

Depending on your personal property, you may want to consider the valuable items endorsement.  You’ll always want replacement cost.  We asked around the office, and not one of our insurance experts for renters could ever recall a single situation where an insured had wanted actual cash value coverage and had it be the right fit for them.  On certain types of homeowners policies, an agreed value is necessary on the dwelling itself, because of unusual construction, but actual cash value is just about always a bad deal on your contents.

To learn more about replacement cost on renters insurance in Tucson, or to find out how to get covered, just call (800)892-4308 or click to get covered - whether you need Tucson, AZ renters insurance quotes online or coverage anywhere else!

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