In policy terms, what does valuation of personal property consider?

• A. The current market price of all items.
• B. The value of items at the time of loss, falling under ACV or RCV depending on policy terms.
• C. The original purchase price.
• D. The appraised value at policy inception.

Answer: (B)

Valuation focuses on what the item is worth at the time a loss occurs, using the method the policy provides: actual cash value or replacement cost value. If the policy uses actual cash value, depreciation is subtracted from the replacement cost, so older items pay less. If the policy uses replacement cost value, you’re paid enough to replace the item with a new, like-kind item, up to the policy limits, with no deduction for depreciation. The policy terms determine which method applies. This is not simply the current market price, the original purchase price, or an appraisal value taken at policy inception.