What Does Replacement Cost Coverage Mean on my Home Insurance Policy?

Regardless of whether you are living in Coppell, elsewhere in the DFW area, or anywhere else in the state of Texas, you have several options as to the extent of insurance coverage you get with a home insurance policy. Your independent agent will educate you regarding the different types of home insurance you can get for your Texas home. We will help you see where and how you might benefit from having coverage that includes replacement cost rather as opposed to actual cash value coverage for your property. Named Perils Home Insurance A named perils home insurance policy will only cover you for damages that are related to things that are specifically named in the policy. Because you get substantially less coverage with this type of home insurance, you will pay less for your policy. All Risk Home Insurance All risk is the most comprehensive type of home insurance you can get. It is designed to provide you with coverage for everything. Any exemptions must be clearly stated in the policy. Comprehensive protection is significantly more expensive, but in the long run, it can wind up saving you money. If you opt for a higher deductible, the rates for your coverage in Coppell, the DFW metroplex or elsewhere will be lower. Understanding the Meaning of Replacement Cost Texas homeowners and renters can choose between replacement cost or actual cash value for their property. Replacement cost is significantly more expensive, but it will pay for the cost of replacing your personal property — or your home as long as the damage was caused by something that is covered. The essential difference between actual cash value and replacement cost coverage is that a policy that only reimburses you for actual cash value will consider what you paid for the damaged property. Since things depreciate over time and with use, a home insurance policy that only covers the actual cash value of things will deduct depreciation for however long you’ve owned the item(s.) If your home was totally destroyed, as long as the cause of that devastation is covered under your home insurance plan in Coppell, DFW or anywhere else in Texas, and you opted to insure your home and its contents for replacement cost, you would get the full cost of replacing the home and its contents from your insurance company. You could easily afford to rebuild your home, something you couldn’t do if you opted for actual cash value.