I cancelled Personal Property Replacement Coverage (HO-29) on my homeowner's policy recently. WHY ?
1) Having HO-29 increased my annual premium by 25%.
2) I do not have expensive personal property.
Prior to canceling, I researched a bit online but was not able to find any analysis. There was analysis on choosing replacement coverage or actual value for a house. The consensus for that seems to be replacement coverage is better for a house, since if it burns down, you want to be able to reconstruct.
Does the same logic apply for personal property ? I'm not sure, but the coverage seems to cost a lot more.
Let's say we pay $500 a year for coverage on a $250,000 house. Now if you have some personal property worth.. $25,000, then I would expect the premium to be only $50. But it was costing $150! Not worth it to me. In addition, I don't have expensive personal property. Washer, dryer, refrigerator. Perhaps if I get better furniture.
Am I being penny wise and pound foolish?
The amount of risk that a renter has to face is the same as that of homeowners, when there is occurrence of any disaster. You might think that since your condo association or your landlord has insurance, the things present in your house will automatically get included. But this is not true. The insurance which they possess will only give protection to the building, not to the objects present in it. In these scenarios renters insurance Agents can help you to get the requisite coverage.
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