I’d like to understand better when it comes to replacing personal property that was damaged, what an insurance company owes their customer? For example, I understand that if a 5 year old couch is damaged, they would likely give you the depreciated value of the couch upfront and if you replace the couch, the difference in the price to replace it.
Now, let’s take a collectible. Let’s say the collectible cost 20 years ago $50. But let’s pretend its worth $500 as its no longer available. Should we expect the insurance company to cover back up to the original cost, or the value lost?
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It depends whether your coverage is rated on “Actual Cash Value” or “Replacement Cost”.
If it’s ACV they will factor in depreciation. (If any) whereas if it’s RC you will be made whole again and fully compensated for the cost to you. (This is usually a stated value agreed upon at the beginning of the policy term.)
[this website may provide more details.](https://www.eqgroup.com/acv_explained/)
Edit: if it’s a collectible then hopefully your agent rated it as RC.
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