This is the Third of our Home Insurance Basics Articles.
Levels of Coverage:
There are three coverage options:
1. Actual Cash Value
This policy pays to replace the home or possessions minus a deduction for depreciation.
2. Replacement Cost
This policy pays the cost of rebuilding or repairing the home or replacing possessions without a deduction for depreciation.
3. Extended Replacement Cost
Some insurance companies offer an extended, replacement cost policy. An extended policy pays a certain percentage over the limit to rebuild the home. Generally, it is 20 to 25 percent more than the limit of the policy.
For example, if homeowners take out a policy for $100,000, they can get up to an extra $20,000 or $25,000 of coverage. Extended replacement cost policies are more expensive; but they offer the best financial protection against disasters for a home.
Give us a call (770-339-4333 or email danny@dknightinsurance.com) to see if we can help You with your insurance needs.