comments powered by
Posted February 11th, 2013
As homeowner insurance costs continue to rise, options to lower policy holders costs become more important. While getting the most comprehensive coverage was the goal a few years ago, the reality is coverage restrictions to contain costs are becoming more prevalent.
One of the strategies for limiting cost while still maintaining substantial protection is to consider changing the type of property protection. Three different options that are available include, Replacement Cost, Cash Value Insurance and Agreed Value Insurance. All three provide different degrees of protection and this can mean significant cost reductions. And while “exact replacement” coverage may be appropriate for some items, “good as needed” coverage may be acceptable in some cases.
For instance, a home that was built with plaster and lath walls and sustains damaged can be repaired a number of different ways. If authenticity is an issue, the building insurance should include replacement cost that includes a provision for same type and quality of construction. If function is the only consideration, than insuring the building allowing for the use of new and less costly (drywall) methods of construction may produce a significant savings in the cost of insurance. Any decisions should reflect the requirements of the mortgageholder.
Along the same line would be the replacement of personal property. If you have a crystal flower vase that was used in your great grandmothers wedding, it could be insured to include an exact replacement in case of loss. If the item is only valued based on its’ function, then a replace insurance based on that criteria should be considered. Other types of personal property that require specialized replacement cost coverage could be collectibles like coins, stamps or artwork.
Your local insurance agent can help you decide exactly which kind of insurance is appropriate for your particular instance. Not only that, because independent agents represents a number of different insurance companies, they may have one company that specializes in the exact kind of insurance you need.
With insurance it’s not always how much you pay that defines the coverage you need. Contact a professional agent who can help you obtain the coverage you need at a price that makes sense.