Figures That Are Important to Your Home Insurance

Learn about some of the values that are relevant to your home insurance coverage.Figures That Are Important to Your Home Insurance

Making sense of home insurance can be difficult. Luckily, understanding the values that are relevant to your policy can help you understand your coverage a little bit better. Here are two of the figures that are relevant to your homeowners insurance explained in detail.

Replacement Cost Value

Replacement cost value refers to the amount of money it would take to rebuild your home if it was completely destroyed. This value takes into account the cost of labor, the cost of building materials, and the cost of bringing your home up to code. It’s extremely important that you correctly estimate your home’s replacement cost value, as it represents the maximum amount of compensation that your insurance company will offer for your home. If you underestimate this value, you will be financially responsible for the cost of any claims that exceed your policy’s limits.

Home Insurance Deductible

Your deductible refers to the amount of money you agree to pay towards a claim before you can access your insurance coverage. For instance, if you have a deductible of $1,000 and your home is damaged, you would have to pay at least $1,000 in repairs before your insurance coverage would kick in. It’s also important to understand that your deductible and your premium have an inverse relationship. This means the higher your deductible, the lower your premiums will be. However, it’s important that you do not set your deductible higher than you can comfortably afford, as this could prevent you from getting coverage when you need it the most.

These are two of the values that are important to your home insurance.  Do you have more questions regarding your homeowners insurance?  Then contact us at ISU-Wissink Insurance in Culver City, California.  Our dedicated team is ready to assist you with all your coverage needs.