These are some of the figures that are relevant to your homeowners insurance.
While most homeowners recognize the importance of having home insurance, many struggle to make sense of the coverages that their policy offers. One of the best ways to understand your homeowners insurance is by understanding the various figures and values that affect your coverage. Here are a couple of these figures explained in more detail.
Replacement Cost Value
Replacement cost value refers to the amount of money it would take to rebuild your home if it was totally destroyed. For instance, this value takes into account the cost of labor, the cost of building materials, and the cost of rebuilding your home to code. It’s important that you correctly estimate this value as it represents the maximum amount of compensation that your home insurer will offer for your home. If you underestimate this figure, then you would have to assume financial responsibility for any claims that exceeded your policy limits.
Home Insurance Deductible
Your deductible refers to the amount of money you agree to pay towards a claim before your insurance coverage kicks in. For example, if you set a deductible of $1,000 and your home is damaged in a storm, then you would have to pay $1,000 in repairs before you could access your insurance coverage. It’s important to understand that your deductible and your premium have an inverse relationship. This means that the higher your deductible, the lower your premiums will be. However, you should be careful not to set your deductible too high as this could prevent you from accessing your insurance coverage when you need it the most.
These are two of the figures that are important to your homeowners insurance. Do you have more questions regarding your home insurance? Then contact the experts at Udell Family Insurance. Our dedicated professionals are ready to assist you with all your insurance needs.