When you are selecting a home insurance policy, one major decision you need to make is whether you want a replacement cost or actual cash value policy. Both types of policies are available to Santa Clarita, CA through insurance providers like us at WPL Insurance Services.
The following are three things you should know about replacement cost home insurance.
Replacement cost insurance will compensate you for the full value of completely replacing your home if it is completely destroyed.
If you choose replacement cost insurance, your home insurance provider will need to calculate replacement costs for your home if you file a claim. This means that any depreciation your home has experienced shouldn’t detract from the amount you are compensated for a claim.
Replacement cost insurance compensates you more in the event of damage than actual cash value policies.
The primary alternative to a replacement cost insurance policy is an actual cash value policy. Such policy factors depreciation into your compensation amounts. This means that you’ll get less for claims if you have an actual cash value policy than you will with a replacement cost policy.
Your premium payments will be a little higher if you opt for replacement cost insurance.
While replacement cost insurance will typically compensate you more, it will also cost more in your monthly premiums. If you’re looking for a policy offering the lowest monthly premiums, you might want to opt for an actual cash value policy.
If you’d like to learn more about replacement cost insurance or other home insurance options in Santa Clarita, CA, get in touch with us. We’re here to answer all your questions at WPL Insurance Services.