By Meha Ahmad, InsuranceAgents.com Staff Writer
There are two different kinds of home insurance policies: replacement cost and cash value homeowners insurance. A replacement cost policy offers better coverage, but for a much higher premium. A cash value homeowners insurance policy is generally much more affordable, but may come with some setbacks. To compare cash value homeowners insurance policies and rates, search online using our quick forms for homeowners insurance quotes. A homeowners insurance agent can help you find a policy that is right for you.
Cash value homeowners insurance is otherwise known as a fair market value policy. So your home will be reimbursed at its market value. Also, your personal belongings will be financially reimbursed at its current worth. That means the insurance company will pay you what an item was worth, minus the amount it has depreciated.
The standard home insurance policy is a cash value policy rather than a replacement cost policy. If you’re more interested in a replacement cost homeowners insurance policy, find out what the cost would be to upgrade to one.
The biggest advantage a homeowner has with a cash value homeowners insurance policy is the affordability. It is generally the cheapest option, so if your biggest home insurance concern is budgetary, then a cash value home insurance policy is worth considering.
However, the biggest setback with a cash value homeowners insurance policy is the financial loss you may feel when you make a claim. It’ll replace any item you make a claim for with its depreciated value. A replacement cost policy is much more expensive, but will give you money to buy a brand new product and does not depreciate the items’ value.
To get a more detailed idea of what cash value homeowners insurance offers, talk to a homeowners insurance agent ASAP. They can help you find the right kind of home insurance policy for you, as well as the right coverage. Start by comparing homeowners insurance quotes online using our simple and free online forms.
Published: Friday 4th September 2009
