When a tree crushes your roof or a pipe bursts, it’s easy to focus on the structure—the walls, the roof, the ceilings. But in a Nashville home, the items inside – your personal property, are often just as valuable as the house itself. Your homeowners’ insurance policy includes Personal Property Coverage, but many Tennessee homeowners under-collect on this coverage because they fail to document it correctly.
Create a “Contents List”
As a public adjuster, I cannot stress this enough: Take a complete inventory.
If a water pipe burst, it might have ruined the Persian rug, the sofa, the clothes and shoes in the closet, and the electronics in the living room. Every single item needs to be documented.
- Take Photos of Everything: Take photos of every damaged item before you throw it away.
- Create a List: Make a spreadsheet. Include the item, approximate age, cost to replace, and a description of the damage. This is exhausting work but necessary to get fully compensated. We have Inventory Specialists who can do this for you and save you the time and headache associated with this daunting task.
“Replacement Cost” vs. “Actual Cash Value”
This is a critical distinction.
- Replacement Cost Value (RCV): What it costs to buy a new one of similar kind and quality today. 99% of homeowners policies in our area have “Replacement Cost” coverage. You need to make sure your claim is being processed for replacement cost.
- Actual Cash Value (ACV): The value of the item after depreciation (what it’s worth now). Once you purchase an item to replace a damaged one and submit the receipt to the carrier they will send you a check for the depreciation they originally withheld.
- The Formula: RCV minus Depreciation = ACV
Don’t Forget “Hidden” Items
Think about the things in your basement or attic that were destroyed. Did you have a Christmas decoration box in the attic that got water damage? What about in your crawl space or basement? Do you have expensive tools in the garage?
- Include Everything: Clothing, curtains, rugs, furniture, electronics, and even food spoilage.
- Receipts: If you have to replace items immediately, keep the receipts.
The “Loss of Use” Factor
If your home is damaged to the point where you cannot live in it (e.g., no heat, no water, or major structural damage), your policy will include “Additional Living Expenses” (ALE) or “Loss of Use” coverage.
- Keep Receipts for Everything: Hotel stays, meals, laundry services, and storage units for your furniture.
By thoroughly documenting your personal property, you can significantly increase the total amount of your settlement. In the next part, we’ll talk about the most common way insurers undervalue claims: the “Low-Ball” estimate. In the meantime, should you have any questions call Franklin Property Claims at 615-622-5358.
