My family had to file an insurance claim for the contents of our house after it was destroyed in a fire.
We had to make a comprehensive listing of every single item in the house. Furnishing, electronics, housewares and clothing. Lots and lots of clothing. We were given an INITIAL payout based on the depreciated value of the item. The insurance company calculated the depreciation based on the age of the items. They had a policy of not depreciating anything more than 80%. Certain items, like fine furnishings, depreciated at a slower rate and had a higher maximum depreciation (50%), IIRC. Our house was older and full of a lot of old crap like really old clothing that had been in storage bins for forever, a big pile of 50 year old scratched up record albums ,some really old junky furniture in the basement, a ton of old kids toys, my late fathers art supplies and piles of junked housewares. So even at 20% of replacement value this added up fast.
We looked up items online to determine the market value. The insurers spot-checked these valuations by looking up similar products online. They used Wayfair for these spot checks and they usually came up with a higher value than we did. I believe they have some sort of agreement with Wayfair and that you could purchase Wayfair replacement items via their software. I might be misremembering though.
And the inventory software we were given by the insurer sucked in a very deliberate way. Because they did not want homeowners gaming the system. So the software did NOT display line item extended pricing or totals.
We did have some artworks that we got covered without depreciation, even though we didn’t have a rider on our policy. I think that is rare and we got lucky. I also got my late father’s artworks covered at market value, which was even trickier. I did have to provide proof that he actually sold his art for money while he was alive.
That was phase one and we got a large initial check after we provided the inventory. Then, as we replaced individual items we got the difference between the depreciated value ( which we had already received) and the replacement value as long as we provided the receipt. For us, this did not turn out to be as much of a windfall as one might think. Mostly because me and my family are bargain shoppers by nature, especially when it comes to clothing.
So, for example, I may have valued my mother’s pantsuits at $125 each with documentation to back that up as the replacement value. But when she was actually purchasing new pantsuits, she was going to her familiar discount outlets and getting them for $20- $30 each. So it wasn’t worthwhile to even submit the receipt. And that was the case with almost all of the small items. We did get some money after we repurchased furniture and electronics. We had 3 years to do this.
But about 80% of what we received was in the initial check for the depreciated value of everything. And it became almost impossible to fully check everything. My mother was driving me crazy by complaining about errors in the valuation of things like her vintage cookie cutters and kept harping on small errors in the thousands of line items. But I just kept looking at the big picture and, at the end of it all, I felt we were not only made whole, but that we got a little extra.
The “contents” part of the policy was treated as a separate claim from the structure. There was a maximum but I’m not sure what it was based on or how they calculated it.