Many people don’t understand important terms in their homeowners insurance policies and are disappointed when they file claims.
If your policy covers replacement cost, it will give you enough money to replace a damaged or stolen item with an identical or comparable one.
An actual cash value policy will pay you for replacement cost minus depreciation. That means you might not be able to replace a lost item with a similar one.
This distinction is particularly important when a homeowner suffers a major loss and needs to replace many expensive items.
Make sure you have the right coverage. If you aren’t sure, check your policy or call your agent.
