When calculating the insured amount for personal property after a loss, what basis is typically used?

The correct basis used for calculating the insured amount for personal property after a loss is typically Actual Cash Value (ACV). Actual Cash Value considers the replacement cost of the item minus depreciation. This approach reflects the item's current market value at the time of the loss, taking into account factors such as wear and tear, age, and condition.

When an insurance policy operates on an ACV basis, the policyholder receives a payout that corresponds to what the item is worth at the moment of the loss rather than what it might cost to replace it with a new item. This method aligns with how most homeowners' policies structure their coverage for personal belongings, especially for items like furniture, electronics, or other personal items that depreciate over time.

Replacement Cost, while also a valid method for some policies, provides a reimbursement for the cost to replace the damaged item without factoring in depreciation, which may not apply in every situation. Market Value refers to the price an item would sell for in an open market and may not sufficiently cover insurance adjustments or depreciation. Future Value involves projections on how much an item will be worth in the future and is not applicable in determining insurance payouts for current losses. Therefore, Actual Cash Value is the standard method used to ascertain the insured amount for