When Texas & Louisiana homeowners are choosing insurance for their home, there are factors to consider that will affect how much is covered and how much the policy costs. One of the big decisions to make is whether your policy covers damages based on ACV – actual cash value or replacement cost. Understanding the difference is important. Actual cash value will protect you for the amount the item is worth at the time. Replacement cost coverage will protect you for what it cost to replace that item at the time of the claim. Taking a microwave as an example. ACV will factor in depreciation. Adjusters will determine what the microwave would be worth if it were put on the market for sale at the time of the claim. If you have replacement cost coverage, they will determine what the cost is to get the same microwave to replace the damaged one at the time of the claim.
Making the decision on whether to choose actual cash value or replacement cost coverage for your home is important and will be affected by a number of factors. The home’s age, value and building materials can affect the decision and cost. Also, the carrier you choose can determine whether you have the option for replacement cost depending on the age and shape of the home.
Is the roof covered? Some Texas & Louisiana homeowner policies cover the roof but depending on the age and condition of the roof, it may be excluded from the policy. Also, depending on the condition, you may only have the option of actual cash value by default.
Like all important insurance decisions, take advantage of your insurance professional to help you better understand what you’re choosing. Give us a call, we’d love to help! 800-856-4782 or 936-634-7755.