Some people feel... 
That s why we want you to know... 
“My house was robbed. 
My neighbor says I 
should ‘pad’ my 
insurance claim. Why 
should I have to lie to 
come out even?” 
You don't have to lie to come out 
even. Your neighbor, like some homeown- 
ers. may be confused about what home- 
owners insurance actually provides for loss 
of contents. Some think it guarantees 
"replacement value.’ In fact, most homeown- 
ers insurance policies provide "cash value." 
There is an important difference. 
"Replacement value means the actual cost to 
replace— brand new— the stolen item. "Cash 
value" means the current depreciated amount 
the item was worth at the time of the loss. 
For example, if your stereo is stolen, a 
standard homeowners policy would give 
you the "cash value." Assume you paid 
SLOOO for the stereo ten years ago: today it 
may be worth S500. So you would get 
S500 from your insurance company, minus 
the deductible you have selected. 
Policies are available that offer "replace- 
ment value" or "agreed value." But. of course, 
these kinds of coverage are more expensive 
than the conventional homeowners policy 
Which kind of coverage is right for you? Most 
people opt for the conventional homeowners 
policy In the event of a major disaster, like a 
fire or a windstorm, it enables you to put your 
home together again. And in the event of a 
burglary it will give you the fair "cash value" 
of the item you lost. 
For more information, consult your in- 
surance agent Review your present coverage 
and ask about the kind of protection you feel 
you need. Determine costs. Check to see if 
your standard homeowners policy provides 
limited coverage on items such as paintings, 
prints, cameras, jewelry, silverware, or furs. If 
so. you may want additional coverage, or 
"floaters " for those valuables. 
A frank talk with your agent can prevent 
surprises and create a better understanding of 
what you can reasonably expect from your 
insurance policy when you have a claim. 
Were working to keep 
insurance affordable. 
This message presented by the American Insurance Association, 85 John Street. NY. NY 10038 
