Hello PIB readers! The next insurance question deals with automobile insurance and coverage for personal property under the contract. Here’s the question, posed by a non-insurance person looking for answers.
Shelly S. of Springfield, Oregon asks the following: “Not too long ago I was shopping in Eugene (Oregon) and my car was broken into while I was in a store. They broke the driver’s side window to get in. They took my stereo and it’s faceplate (which I had hidden under the front seat). They also stole a bunch of personal items that I had in the car: several hundred dollars worth of clothes (my workout gear and shoes), my IPOD (a 30-gigabyte model), about 15 CDs, a bottle of vodka (unopened!!), and some household items (a new pan, a spatula and similar) I had just purchased. When I submitted my claim to my car insurance company, I found out that I had a $500 deductible for “other than collision” [comprehensive] coverage. They asked me to get them some estimates on the stereo (which I did) and forward that info to the insurance company. The stereo replacement cost is $279 for the exact same model. The window (per the insurer) is $400. The cost to replace the other stuff that was stolen was about $800 total. I submitted my claim for $1479. The other day the claim’s guy called me back and told me some things that I am not too pleased about. He told me that they would allow the full $400 for the window, but they would only give me about $223 for the stereo, and they weren’t going to pay me anything for the other things that were taken!
I got kind of angry, and asked the claims rep “why am I paying for insurance if you aren’t going to cover anything?” He told me that car insurance usually doesn’t pay for personal property stolen from the car, and told me to submit a claim for that stuff to my homeowner’s insurance policy (I don’t have one, I’m a renter), and that the car insurance would only pay the depreciated value of my stereo and not the full replacement cost. He said the stereo was only worth about 80% of the replacement cost, and mentioned something about “actual cash value” (which I didn’t understand). Can you help me? Do I need a lawyer?”
Shelly, Shelly, Shelly…didn’t anyone ever tell you to NEVER keep stuff in your car that can be seen by thieves and other less-than-sociable types? I have heard of people that have had their cars broken into for pocket change. In the “oh, by the way” department: not a good idea to hide your faceplate under the seat. It’s where most people keep them and where most thieves look for them, because the thieves know that most people are lazy and don’t want to carry the faceplate with them. It’s always a good idea to place any valuables (valuables? heck…everything) out of sight when leaving your car. Now onto the question at hand…
No…your car insurance didn’t shaft you, and the claims rep was more than likely right on the money. Automobile insurance is meant to cover those items that are “incidental” to a car, and not those items that are incidental to a home. In other words, your car insurance takes care of car stuff, like tires, windows, car stereos (that can only be used in the car) and similar “car” associated items. Items that are normally stored in your home, such as clothes, etc. are not covered by car insurance. Your CDs and IPOD (you didn’t mention whether your car has an IPOD adapter) are probably excluded from coverage, however there are certain car policies that will take care of personal property if it can also be used in the vehicle. These types of contracts provide minimal coverage (at best) and commonly require that the theft of personal property occur a certain distance from home. If there is any coverage for those items, it will more than likely be very limited; possibly as low as $200. You will have to look at your car insurance policy for specifics on this. Another great place to seek out info is at this link (generic info): auto insurance answered
As far as the depreciation on your stereo, this is a standard provision in car insurance. Auto policies generally do not pay for full replacement cost for stolen or vandalized items. The term “actual cash value,” or “ACV” is an industry term that is used instead of the term “depreciated value.” They are basically the same. An ACV settlement (specifically) means “replacement cost minus depreciation.” For example, if the car stereo had a replacement cost of $279, and you were offered roughly $223 as a settlement, it means that the adjuster subtracted approximately 20% for depreciation. You probably had the stereo for a couple of years or so, give or take, and that’s just a guess as to how long you had it. The same would be said for tires, for instance, if they were slashed by vandals. If you had 80% tread life remaining, you would receive 80% of the replacement cost of a new tire, minus any deductible that applies.
As far as your renters situation is concerned, there IS insurance for renters! It will take care of your personal property and personal liability exposures (usually anywhere in the world except at any other location that you own) for many types of loss risk. Renter’s insurance policies, commonly referred to as “tenant homeowner” policies, are fairly inexpensive on a yearly basis. A good policy can usually be found for $200 per year or so, and most carriers are giving multi-policy discounts if you have your auto concurrently insured with that same insurer. The tenant homeowners insurance policy would have covered your personal property loss after the deductible was applied!
I’m sorry for your loss, but I hope that I have answered your questions. Please let me know if there is anything else!
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