This all sounds like a potential nightmare. Let me set up a possible scenario. You have a home owners's policy with a $200,000 limit of liability with replacement coverage for personal property. Your home has a fire and you have a total loss of your $150,000 stereo system. You make a claim with your insurance company for that $150,000. You do not have any money to re-buy your system. What are you going to get paid by the insurance company? Are they going to replace your system even though you have no money to do that yourself?
Home owner's insurance question
Reading through my policy it would appear that through the personal property section an audio system is covered for loss. No special rider is necessary. But the replacement cost section states that the insurance company won't pay until you actually replace your stereo system. If one makes a big claim, let's say $100,000, how does one pay this first if you're going to get paid afterwards? What if you don't have the money to re-buy your system or you choose not to replace it? Can any insurance experts explain to me how these home owner policies actually work?