You have cash value coverage for your personal property on your homeowner's policy. A camera that cost you $300 eight years ago had a life expectancy of 10 years. The camera was stolen, and a new one will cost only $100. How much will the insurance company pay?

Question

Quizplus · Accepted Answer

Cash value coverage pays the depreciated value of the item. The camera is 8 years old with a life expectancy of 10 years, so it has 2 years of value left. The depreciation is 80% (8/10 years), so the insurance will pay 20% of the original cost: $300 * 20% = $60.

You Have Cash Value Coverage for Your Personal Property on Your