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The difference between Homeowners Replacement Cost and Actual Cash Value.

house damageYou have two main areas where this coverage comes into question.

An H-03 (the most common type of policy) typically comes with a replacement cost on the structure. For example, if you have roof damage, the field adjuster meets you at the property to assess the damage. He does not know what your policy contains. Let me give a hypothetical example. You have roof damage; to replace it is $15,000. Dollar, he will take out the deductible, look at age, wear and tear, and actual cash value, and deduct another amount for the depreciation. If you have a replacement cost, the total amount to replace the roof will be minus your deductible.


Personal property coverage (t.v., furniture, and everything not attached to the structure) is the most common where you must make this critical decision. Most people do not know if they have it until they have the claim, and it is too late. Like the structure, the field adjuster does not know what you have, but he will list the actual cash value and replacement cost. The best way I explain it to customers is when you have to go and replace your property, do you want to buy it new or go to salvation army or yard sales?


There are many different options in your policy. Ensure you have the right coverages, or you are not paying for something you don’t need. Contact your agent today or give Lock Insurance a call. We would happily review your coverage even if you are not an existing client.

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