Three Types of Homeowners Coverage

What are the three levels of homeowners coverage?  First and foremost, there are eight insurance policies for you to choose from, but how do you even know which one to choose from? The first step to choosing a homeowners insurance policy is to gain a comprehensive understanding of what you are paying for, how you are paying and why. Start with this blog to gain a better understanding of the different types of coverage that are available for you. 

Homes that are in HOA Neighborhoods May

Homes that are in HOA Neighborhoods May

 

Level One

  1. Actual Cash Value (ACV): how much your house and belongings are currently worth minus depreciation, deprecation takes age and wear and tear into account when evaluating a claim.
    1. HO-1, HO-10, 
    2. Tends to have a lower premium
      1. For example: 
        1. You purchased a roof for $10,000 five years ago, 

- $3,000 of depreciation wear and tear 

- $2,000 deductible

$5,000 claim towards a new roof

Level Two

  1. Replacement Cost: the same as ACV BUT, without depreciation deductions
    1. HO-2, HO-3, HO-4, HO-5, HO-6, HO-7
    2. Replacement cost is the most popular option because it is affordable and reliable
      1. For example:
        1. You purchased a roof for $10,000 five years ago, 

- $2,000 deductible

$8,000 claim towards a new roof

How well does your insurance policy cover your roof when it matters?

How well does your insurance policy cover your roof when it matters?

 

 

Level Three

  1. Guaranteed (or extended) replacement cost/value: the most comprehensive policy, pays for whatever the cost to rebuild your home EVEN if it surpasses your policy limits. 
    1. An extended policy, that can cover cost up to 20-25% beyond your limits. 
    2. The cost of this policy is dependent on the level of risk in your area.
      1. For example:
        1. You purchased a roof for $10,000 five years ago, 

Damages are $12,000

Guaranteed (or extended) replacement cost/value covers the extra $2,000

 

Now that you are a homeowners insurance expert, let’s dive deeper into the best options for you. 


Get started with us today and discover the best plan for you.

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