Homeowners insurance is complicated. It’s important that customers understand the coverage and costs associated with their policies. Before buying a new home insurance policy, you may need to know the answers to these questions.
What Type of Coverage Am I Buying?
A standard home insurance policy offers either replacement cost coverage or actual cash value coverage. Replacement cost is the amount you need to replace or fix your property. Actual cash value means a claim pays you the amount your property is worth as the time of the loss. Here’s an illustration to understand the difference in coverage.
A windstorm blew a tree onto Richard’s house. It will cost $17,000 to replace his roof, three windows, and damaged siding. If Richard has a $1,000 deductible and replacement cost coverage, his policy pays $16,000 to restore his property. However, it turns out Richard has a $1,000 deductible and actual value coverage. His policy paid $12,000 because the roof, windows, and siding had depreciated in value by $4,000 since being installed.
Does Homeowners Insurance Cover My Valuables?
Your homeowners policy will include coverage for your personal belongings. That coverage might not be sufficient if you own expensive jewelry, sporting equipment, musical instruments, rare antiques, or fine art. An insurance agent can help you understand coverage limits, exclusions, and the possible need for additional coverage.
How Can I Lower My Premium?
Raising your deductible isn’t the only way to decrease your home insurance cost. Installing devices to protect your home from fire and theft usually lowers your rate. Depending on your personal circumstances, you may be eligible for additional discounts. An insurance agent can provide you with details.
Our agency is happy to answer your questions related to home insurance policies. Contact us today to find the right policy for you.