How to Compute the Replacement Cost of Belongings

How to Compute the Replacement Cost of Belongings. Among one of the most important homeowners insurance coverages you will ever need is the replacement cost of personal belongings. Not just jewelry, furs and coin collections but personal finances, stocks, bonds and furniture. These need to be covered adequately in the event of fire, theft and any catastrophic or major event.

Compile a list of all your personal belongings including all finances. You can cover your personal belongings by using actual cash value coverage, replacement coverage or guaranteed replacement cost coverage. Actual cash value coverage means you would receive the amount the belongings are valued at when you obtained the coverage. The replacement cost coverage is coverage for the amount that your item would cost today if you sold it at a garage sale or auction. And the guaranteed replacement cost coverage offers no limits on the cost of replacing the items and pays for replacing your belongings no matter what.

Protect yourself through your homeowners policy. Your homeowners policy usually has personal liability coverage at $100,000; however, if you have personal assets worth $300,000 to $500,000, get an endorsement to your policy to cover the additional amount. If your personal assets are more than $500,000, get a homeowners insurance umbrella policy that covers any personal assets over $500,000.

Appraise your belongings. If you have a great deal of belongings and you truly want to know how much your belongings are worth, hire an appraiser to come in and determine the value of your physical documents and belongings.

Consider buying an extra policy for furs, jewelry, special computer equipment and anything that is highly valuable. Take pictures or use your camcorder to photograph the items in their original condition in the event of a loss.

Check your homeowners insurance policy under the personal property section. There are standard personal property limits on a standard homeowners policy. If you feel your personal belongings are worth more than this, talk to your agent about either increasing the limits or getting a personal property endorsement. Some insurance companies refer to them as floaters. There is no deductible to worry about, and your personal belongings such as silver, collections and special computer equipment are covered on their actual cash value. Provide your agent with receipts or an appraisal certificate indicating the exact dollar amount of the items.


  • If you don't have many personal belongs or don't have special personal finances such as stocks and bonds, the standard homeowners insurance policy may provide adequate coverage in the event of a complete loss.

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