You've heard it before- "A man's home is his castle'_ and, in just as many cased, "A woman's home is her castle" too! If you happen to be like most people, your home is probably your most prized and valuable possession. That's why it's important to make certain you are properly and adequately insured so that, in the event that your home is destroyed or damaged, your homeowners' policy will cover 100 percent of the cost to either replace it, or repair it.
When purchasing homeowners' insurance, you can have your home, and its contents, insured for "replacement cost".
Replacement cost refers to the amount it would cost to replace or rebuild your home or repair damages, using materials of a similar kind and quality, without deducting for depreciation (depreciation being the decrease in value because of age and wear and tear). If you are adequately insured, and have replacement cost coverage, our home will be replaced or repaired to its prior status. As an illustration, imagine your 10-year-old roof is completely destroyed, and would cost $30,000 to repair. Even though the roof has lost half its useful like, the insurer will cover the entire cost to repair the roof, if you have replacement cost coverage.
Under a standard homeowners' policy, the contents of your home are generally covered on an actual cash value basis (factoring in depreciation, the amount that the insurance company would pay you). But many insurance companies offer an option to insure contents at replacement cost. Keep track of the contents of your home using the Know Your Stuff-Home Inventory.
So, what can you do to ensure that you maintain adequate homeowner' coverage? If you've made changes or improvements to your home, are unsure of what "loss cost valuation" method your policy contains, or are simply concerned about having and maintaining adequate coverage, you should contact your agent and request a coverage analysis as soon as possible. While making policy coverage decisions is yours, and yours alone under the law, as your independent insurance agent, our professionals at Smathers Insurance Agency can help explain your options so that you can make informed decisions.
-compliments of IA&B