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Home owner's insurance question

Reading through my policy it would appear that through the personal property section an audio system is covered for loss.  No special rider is necessary.  But the replacement cost section states that the insurance company won't pay until you actually replace your stereo system.  If one makes a big claim, let's say $100,000, how does one pay this first if you're going to get paid afterwards?  What if you don't have the money to re-buy your system or you choose not to replace it?  Can any insurance experts explain to me how these home owner policies actually work?
philharmonicpete
ericsch
180 posts
 
@cleeds As I wrote, every insurance policy has exclusions, auto, property, life, personal article floaters, boat, etc. etc. "All risk" is a term that is used to differentiate from a named peril policy.

@koestner If the speaker is no longer in production, its replacement cost would be the current market price or actual cash value.

If the speaker is still in production and has a replacement cost of $15,000, the policy would cover the cost of replacement. However, the insurance company has the option of replacing it themselves at their cost. Sometimes they can acquire the item for less than retail. If you choose to buy a more expensive speaker, you can only collect up to the RC value of your claimed speaker. Keep in mind, I am referencing the most common Homeowners Policy known in most states as a HO-3 policy. Best to check with your company or agent.
mr_m
1,087 posts
 
Is it true most insurances will cover a "Zombie apocalypse?"...:-)
mrdon
51 posts
 
I have been thinking about the same insurance question since i have revamped both of my systems and continue to add to them. Question is, i have renters insurance only and was told my the issuer that it is capped at 5,000, is there no recourse such as adding or just hunting out an insurer that will increase the coverage? 
philharmonicpete OP
21 posts
 
Thanks for the many excellent replies.  My policy states: "You may elect to disregard the Replacement Cost provision in making a claim, but your election shall not prejudice your right to make further claim within 180 days after the loss for any additional liability brought about by this policy condition."  Is this the legal jargon saying what @dweller and @tuberist state?  In other words you get paid the depreciated value and then the replacement value only if you re-buy?
uncledemp
277 posts
 
I think these are great questions to clarify with your agent. They should know or be able to find out details regarding your specific situation and answer your concerns.

I agree with one of the other posters stating the quality of your rep is an important/critical link in the service chain. I’ve been with the same carrier over 35 years, but did have to request a change in reps one time 15 years ago. Otherwise, smooth sailing.

Best,

Gary
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