● Deductible

When damage occurs to your home, personal belongings or

separate structures on your property, any claim settlement that is made is subject to a deductible.

 

For example, let’s assume your policy has a $500 deductible and a fire damages your home. If the actual cash value repair cost were, say $20,000, the insurance policy would pay $19,500 for your claim. 

 

 

● Replacement Cost of Contents

Insurance policies pay what is known as ‘actual cash value’ when a loss or claim occurs. This means that depreciation is taken on most of your personal property items.

 

You can add an optional coverage to your policy called Replacement Cost of Contents. This will provide an additional amount to be paid  after you replace the item. There are some restrictions, however, on the extra amount paid.

 

For example, a burglar steals items from your home including your 23 inch color television which is five years old. Lets assume the

actual cash value is $100, but the cost to purchase the same

television again is $395. The insurance company pays you the $100 first and when you purchase the replacement television you are then entitled to collect a further payment from the insurance company. This type of personal property does have a replacement cost limit of 400% (or four-times) the original settlement or actual cash value.

 

 

● Replacement Cost of Building

A typical homeowners insurance policy sets the amount of dwelling coverage based on what it would cost to rebuild your home as it was  prior to a claim. But what if the coverage amount is not enough to rebuild your home? That’s where Replacement Cost of Building

coverage comes into play. This optional endorsement can be added for a very small premium. It makes available an additional amount of protection, extending the dwelling amount of coverage by an

additional amount– up to 25%.

 

 

 

 

● Coverage descriptions provided are general in nature only. Any description provided here does not amend, alter or modify the terms of your insurance contract. Be sure to read your policy for further definitions, limitations and exclusions.

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