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ACV and RCC Rental Property Insurance

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Rental property insurance will protect renters from damage to their possessions in the event of an emergency covered by the policy. Two types of insurance policies are available for renters – ACV and RCC policies – to find out which policy may be right for your rental insurance needs check out the info below.

ACV vs. RCC Rental Property Insurance

ACV rental property insurance, or actual cash value insurance, is a policy that will refund the cash value of damaged property. For example, if you have an older computer which has a cash value of $200 dollars that is the amount you will be paid if the computer set is damaged.

RCC rental insurance, or replacement cost coverage insurance, is a policy that will refund the amount of money it costs to replace damaged belongings. Under this policy, if you paid $500 dollars to replace the older computer (worth $200 dollars) that was damaged you will be reimbursed the $500 dollars.

Comparing ACV and RCC Rental Property Insurance

ACV and RCC insurance have different types of deductible and payment polices:

  • ACV insurance usually has a lower deductible than RCC insurance.
  • An ACV insurance policy may provide you with the total refund of your damaged items, with the deductible subtracted, before you replace the items. With an RCC insurance policy most renters must buy their new items first and then send the receipts to the insurance company for reimbursements after they pay their deductible.
  • Although the deductible and payment policy for ACV insurance may seem more advantageous in the short term, renters will actually recoup a higher reimbursement for their damaged belongings through RCC insurance.

Choosing Your Rental Property Insurance

To choose the right type of rental property insurance, weigh the costs of the deductible and out of pocket expenses. If you have a savings nest which can help to carry you over if your belongings are lost in an emergency, an RCC policy may be best. However, if you will be unable to pay for a deductible right away or to pay out of pocket to replace your items before you are reimbursed, it may be best to stick with an ACV insurance policy. Insurance companies do not always offer a choice between ACV and RCC insurance, so always ask first before you request a policy quote.

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