Contents and Personal Property in the Appraisal Process

Browse the full Resources Index

Contents and personal property, meaning the furniture, electronics, clothing, and other belongings within a home rather than the structure itself, present a different set of evaluation challenges than dwelling damage. Where structural repair scope can often be assessed through direct physical inspection and measurement, contents claims depend heavily on documentation, since many items may have been discarded, damaged beyond recognition, or simply are no longer available to inspect directly by the time an appraisal occurs.

Inventory documentation is the foundation of a contents evaluation. A detailed inventory generally identifies each item, its approximate age, its condition prior to the loss, and where possible, the original purchase information or a reasonable estimate of value. Photographs taken before the loss, receipts, and even secondary sources such as credit card statements or product manuals can support an inventory when original purchase documentation is not available. The more specific and organized the documentation, the more directly an appraiser can evaluate the claimed items against actual policy provisions and market information.

Like kind and quality is a standard applied throughout much of the property insurance industry when valuing damaged or destroyed contents, meaning the replacement or valuation of an item is generally based on a similar item of comparable quality, features, and condition, rather than an upgraded or downgraded version. Applying this standard requires identifying what the original item actually was, which is another reason detailed inventory documentation matters. A ten year old sofa and a comparable current model of similar quality are not identical, and pricing research needs to reflect the actual characteristics of the original item as closely as available information allows.

Depreciation is a factor that commonly applies to contents in a similar way it applies to portions of a dwelling, reflecting the age, condition, and useful life remaining in an item at the time of loss. How depreciation is calculated and applied, and whether a policy includes replacement cost coverage that allows for recovery of depreciation once repairs or replacement are completed, are policy specific provisions. The appraisal process evaluates the amount of loss; how depreciation is ultimately applied within that amount depends on the specific policy language involved.

Salvage is another consideration that arises with damaged contents, particularly items that are damaged but not a complete loss, or items with some residual value even after significant damage. Whether an item is a total loss, a partial loss that can be cleaned or repaired, or has salvage value that offsets its claimed value, is a factual question that depends on the item’s condition, the type of damage involved, and in some cases the input of restoration or cleaning professionals with specific expertise in that category of contents.

Because contents claims often involve a large number of individual items, each with its own condition and value question, this category of loss frequently requires more line item level evaluation than dwelling damage. An appraiser or umpire approaches contents the same way as any other part of the loss, forming an independent opinion based on the documentation available and accepted valuation practices, without assuming a position favoring either party in the claim.

This article is general education about how the appraisal process commonly works. It is not legal advice, and specific procedures can vary by state and policy.

Russ Lis is a working property insurance appraiser and umpire based in Minnesota, serving clients nationwide. Contact Appraisal Resolution.