Harris, Reed & Seiferth
You’ve purchased your home. You’ve purchased insurance to protect it in the event that it suffers damages or a complete loss. Unfortunately, many people too often make the mistake of buying whatever is the cheapest, assuming that all Homeowners policies are the same. When you’re reviewing the details, you’ll notice that you’re covered for actual cash value or full replacement cost -understanding the difference will help you to identify the coverage that you need.
When your insurance company pays to get your home back to the state it was in before the claim, this is called full replacement cost. This is why your home is usually insured for a lot more than you actually paid for it as building rates and materials are constantly increasing and must be factored in to rebuilding your home - costing much more than it originally did. Contrarily, when your insurance company pays actual cash value, they are only paying what your home was worth at the time of the loss minus any depreciation.
For example: say that your California King was burned in a covered firm claim. You would get a new bed in the same style and value as the original was bought in if you have full replacement cost insurance. Essentially, you would be getting a brand new identical bed. On the other hand, you would only get what your bed was worth at the time of the fire if you have actual cash value insurance.
Does that make sense?
Harris, Reed & Seiferth Insurance Group is an independent Agency that shops to find you the best value for your insurance dollar. No compromise in coverage or quality, and at renewal we shop again to insure our clients are still receiving the best value for their insurance dollar. If you have more questions, give us a call today to learn more and get a quote.
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Harris Reed & Seiferth Insurance Group
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