Policy checks
By Glen Avery Last checked Nov 9, 2026
These facts come from Washington's state insurance office. Its pages are for people in Washington. Rules differ by state. Use them to learn the words. Then check your own policy. Your own state's insurance office can help too.
How lost things get valued
Replacement cost
Washington's insurance office says replacement cost coverage "pays to repair or replace your property at today's cost without deducting for depreciation." It adds that most home policies include it. (Washington OIC: Learn how home insurance works)
Actual cash value
Actual cash value pays what the item is worth now. Wear and age come off first. The same page gives an example. Say you bought a TV for $1,000 five years ago. You'd be paid what it is worth today, not what you paid.
The term shows up on car policies too
Washington's glossary says actual cash value applies to both auto and homeowner insurance. (Washington OIC: A consumer's insurance glossary)
The parts of a home policy
Washington's insurance office lists the main parts this way (Washington OIC: Wildfires and insurance):
- Coverage A, dwelling: the main structure of the home and attached fixtures.
- Coverage B, other structures: detached things like a garage, shed or fence. The office says this often has a limit of 10% of the dwelling amount unless you raise it.
- Coverage C, personal property: furniture, TVs, appliances and most things in the home. Some items have lower limits, like jewelry, cash and guns. You can list them on their own to raise the limit.
More than one deductible
The same page says some policies in higher-risk areas carry a separate, higher deductible for wildfire damage. It suggests reviewing your declarations page so that deductible doesn't surprise you.
Self-check
1. Your policy pays "actual cash value" for your sofa. What does that mean?
- Answer: It pays what the sofa is worth now, after age and wear, not what a new one costs.
2. Your shed blows down. Which part of the home policy usually covers it?
- Answer: Coverage B, other structures.
3. Where do you look to see if you have an extra deductible for one kind of damage?
- Answer: The declarations page of your policy. If it is unclear, ask your insurer to explain it in writing.