Buying a new home is one of the most exciting times in your life. Owning a home comes with a lot of responsibility, including making sure that you and your home are protected in case of any unfortunate incident. When investing in the right homeowners insurance policy for your needs, it is important to make sure that you insure your home at replacement value rather than the actual cash value.
Insuring your home for the replacement value ensures that your insurance company will cover the cost to replace, repair, or rebuild your home with similar materials to the quality and kind that was originally used. There is no deduction for depreciation with replacement value, or a decreased value of your home due to wear and tear or age.
So why should you insure your home at the replacement value? The cost of construction increases over time, which means the cost to rebuild your home with similar workmanship and materials will probably be higher than what you could sell your home for.
If you make any renovations to your home, it is important to keep your insurance provider updated so that they can update your policy with the new value of your home. If you do not let your insurance provider know about the new, increased value of your home, you will not be able to completely rebuild or replace your home if it is damaged or destroyed since they will not know the true value.
For all of your homeowners’ insurance needs, contact the insurance professionals at Steve Wilk Insurance Agency in Lombard, Illinois. As an independent insurance agency, we will work with you to ensure that you have the right amount of coverage to fit all of your specific needs.