Buying a home is the largest investment most people make in their lifetime, so it is important to secure your investment. Home Insurance in Tyler, TX is protection for your home as well as your personal belongings. When you speak with your agent from the Kit Parkhill Insurance Agency you will find that there are several different types of home insurance coverage options. One of the things you will need to decide is if you want actual cash value or replacement cost coverage. The following information will be beneficial in determining which will be the best suited for your needs.
When you take out Home Insurance in Tyler, TX the insurance company will assess the value of your property. The actual cash value means how much it will cost to replace the property after determining the amount of depreciation. Depreciation, is a percentage of the price the original value that accounts for normal wear and tear. So, actual cash value means that over time the property will have a lower value than it was originally, unless there are additions and changes to the property. If you have made changes and improved the property, the improvements will over compensate for the depreciation value.
Replace cost is the term used for replacing the property without deducting the depreciation costs. Replacement coverage typically does not take into account the value of the land or the location of the property. Replacement value means the actual cost it will be to replace the property, so if the value of an identical home has increased, you will get the value it will cost to replace your home.
If you choose replace cost over actual cash value, it will be slightly more expensive. However, it is important to keep in mind that this will apply to the personal belongings you have in the home as well. So, if for example, you have a television that was damage by a fire, with replacement coverage you will be given the value it will cost you to buy a new, identical television. If you have actual cost coverage and your television is ten years old, the value will be what the television was worth ten years ago minus the depreciation value.
