Understanding Replacement Cost Coverage

If your home should ever be destroyed or damaged beyond repair, you will want to make sure that your homeowners insurance covers the full cost of rebuilding it. After all, with the cost of housing supplies and labor continually rising, rebuilding your home might cost you more than your home was originally worth. Here’s a review of two good options to know as you search for home insurance online.

There are two options for making sure that you are covered. The first is Guaranteed Replacement Cost Coverage. This coverage ensures that you will be fully repaid for the cost of rebuilding your house in case it is damaged or destroyed, regardless of how much it costs. This option provides the peace of mind in knowing that you are totally covered for all losses.

The other option is Extended Replacement Cost Coverage. While cheaper than Guaranteed Replacement Cost Coverage, it does have the downside of only covering replacement of a house for up to 125 percent of the original cost of the home. Both policies are smart to have since building materials can be at a premium after a major disaster. When getting free home insurance quotes, make sure to inquire about these options.