What Are the Three Levels of Coverage with Homeowner’s Insurance?

If you are interested in learning about the levels of coverage when it comes to homeowner’s insurance, you are in the right place. Before delving any further, we would like to first point out that not all homeowner’s insurance policies are equal. You should know – right now – while it is true that you can get cheap insurance, it also comes with the least amount of coverage.

Today, there are several forms of homeowner’s insurance that are now considered standardized. These each offer various levels of protection. Generally speaking, there are three basic levels of coverage that you may obtain. Continue reading to learn more about these coverages. 

  1. The Actual Cash Value

In terms of homeowner’s insurance, the actual “cash value” refers to the cost/value of your home and the value of the other items you have within the home. It is the figure that is established after deducting the amount for appropriate depreciation. In other words, the value of your home and belongings at what they are CURRENTLY valued at – which is usually LOWER than you actually paid for those items. 

  1. The Replacement Cost

The “replacement cost” overall value in your homeowner’s insurance policy covers the cash value of the home and that which you own – BEFORE deducting for the depreciation. In short, this means that if you had to repair your home – or even rebuild it – you could do so up to the original overall value. 

  1. The Guaranteed Replacement Value

This – essentially – covers what it will cost to repair the home or rebuild it. This stands even if it is more than the limit that is outlined on the policy. In most instances, there is a maximum amount – which is often referred to as a “ceiling”. This may be somewhere around 20% over the amount that is designated as the “limit” that is outlined in the policy. 

How to Reduce Your Premiums 

If you want to save money on your premium in order to obtain more coverages on your homeowner’s insurance policy, consider doing the following:

  • Raise the Deductible Amount
  • Install a Security System
  • Pay off the Mortgage as Quickly as Possible
  • Regularly Engage in Comparison Shopping
  • Avoid Making a Claim Unless Absolutely Necessary 
  • Bundle Homeowner’s Insurance with Other Types of Insurance – Such as Car Insurance

Contact Us Today 

We here at Modica Associates specialize in helping customers – just like you – get the insurance that they need at the most competitive prices. We will work closely with you to determine what types of coverages that you need in the area where your home is located and will do the shopping for you for the absolute best rates.

We also offer vehicle insurance, have brownstone insurance policies, property insurance, and more! We do not specialize in commodities. We specialize in a service. We believe in developing a partnership with each of our clients so that they may get maximum coverage at the best value possible. Contact us now by calling: 718-855-1836

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