Without a replacement-cost endorsement, how is a covered loss to personal property (Coverage C) settled on a standard HO-3?
a.Stated value scheduled in the declarations
b.Actual cash value (ACV), i.e., replacement cost minus depreciation
c.Full replacement cost in every case
d.Market value of similar used items
Explanation
By default the HO-3 settles Coverage C losses on an actual cash value (ACV) basis — the replacement cost of the item minus depreciation for age and wear. A common optional endorsement, sometimes called Personal Property Replacement Cost, upgrades the settlement to full replacement cost (no depreciation) if the insured actually replaces the item within a stated time.
Law Reference: ISO Homeowners — Personal property loss settlementThis topic, taught in full in the California Property & Casualty Broker-Agent guide. California Property & Casualty Broker-Agent Study Guide — 2026 Edition — PDF + EPUB, $24.99 · 14-day refund →
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Related questions on this topic
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