P-III.A · Insurance on Residential Properties
Personal property replacement cost endorsement
Without an endorsement, personal property is settled at actual cash value. The personal property replacement cost endorsement moves Coverage C, and items such as carpeting and household appliances, from actual cash value to replacement cost.
Some property stays at actual cash value even with the endorsement:
antiques and fine art that cannot be replaced;
memorabilia and collectors' items;
articles not kept in good or workable condition;
obsolete articles in storage.
California sets the timing. When a policy requires replacement to collect full replacement cost, the insurer pays actual cash value first and pays the difference once the property is replaced (Section 2051.5(a)(2)). The policy may not set a time limit shorter than 12 months from the first actual cash value payment (Section 2051.5(b)(1)(A)), so an older national form's 180 days would fall short.
Remember
· Endorsement moves Coverage C from ACV to replacement cost.
· Irreplaceable antiques, collectibles, worn-out and obsolete items stay at ACV.
· California: at least 12 months from the first ACV payment to replace.
CA
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