Learning All About Insurance Policies
About Me
Learning All About Insurance Policies

My name is Eric Bowman, and if you have questions about insurance, this is the blog you need to read. I was always confused when I had to purchase insurance. I would either end up paying for insurance I didn't need or I wouldn't buy the right policy. I finally decided that I was going to learn all I could about insurance policies so that I would understand exactly what I was buying. Now, I am completely satisfied with my insurance and the coverage is just what I need. I realized that there are others who are probably just as confused as I was, so I am writing this blog to help others get the best insurance for their needs and budget. I hope that my blog gives you the information you need to make the right choices when purchasing insurance.


Learning All About Insurance Policies

The Different Ways Structure Coverage Is Determined With Home Insurance

Anthony Rhodes

When you own a house, it is always important to carry an insurance policy that protects the home, and this type of policy is called homeowners insurance. The policy you purchase will not only protect the structure of the home, but it also protects the things you have in the house, and it is always important to understand how the coverage of your structure works with the policy you have. There are different methods used for this purpose, and it is important to understand these and choose the right type of coverage for your needs. Here are several things to know about the structure coverage with homeowners insurance.

There are three main options

With homeowners insurance, there are three main types of coverage options that refer to the way an insurance company calculates the amount to give you if damage occurs. These types are replacement cost, actual cash value, and extended replacement cost, and there are key differences with these.

The option that offers the most coverage is extended replacement cost. If your home burns down in a fire, your insurance company would not only give you enough money to rebuild the home, but you would get extra for it. A policy like this will often give you an extra 25% of the costs of rebuilding the house, which means you should have no trouble replacing your house with a new house.

With replacement cost, you will get an amount of money that is equal to the current value of your house prior to the fire or peril, and this is the most common method used with home insurance policies.

Actual cash value is the method used that gives you only the actual amount your house is worth. If you have an older home, you might not receive enough compensation from your policy to rebuild the house if this is the method used for your policy.

How to choose the right option for you

You have the option of choosing the type of coverage you want for your home, and you should carefully think this decision through before deciding. The costliest option is the extended replacement cost coverage, but it will also give you the most protection. A policy that uses the actual cash value will be the cheapest to pay for but will provide the least amount of coverage.

If you have questions about the coverage you have on your policy, talk to a homeowners insurance agent. This is a great way to ensure that you are fully covered if you ever need to file a claim for damages.