Replacement Cost and Homeowner’s Insurance

You probably already know that having homeowner’s insurance is an important tool for protecting your family against the unknown. But what happens if your house is damaged by a storm or fire and needs to be completely replaced? And how much money will you be given for personal property?

That’s where Our Presley Insurance Group team can help. Keep reading to learn what you need to know about replacement cost coverage and homeowner’s insurance in Dallas, TX.

What is Replacement Cost Coverage?

Replacement cost coverage is a portion of your home insurance policy that pays for new items of like, kind, and quality if your home or belongings are damaged in a covered claim, like a fire or storm. This means that instead of receiving a depreciated amount for the building and your personal property, you’ll be given what it costs to replace this same item at today’s prices. 

Does Home Insurance Automatically Come with Replacement Cost Coverage?

Yes and no. With some home insurance carriers, replacement cost coverage is the default option. Others require you to upgrade from actual cash value (ACV) to replacement cost. This is why it is important to discuss your desire to have replacement cost coverage with your agent.

Will Replacement Cost Value Pay for Home Upgrades?

The thing about replacement cost value is that it doesn’t pay for upgrades for your home items. For example, if you have a basic 40-inch flatscreen television and your house burns down, your policy won’t pay for the 80-inch 4K you’ve had your eye on. Likewise, it is the same for building materials. If your kitchen countertops were ceramic tile before, your homeowner’s insurance wouldn’t pay for an upgrade to granite.

Ensure your family is fully protected with a Dallas, TX homeowner’s insurance policy. Please contact our Presley Insurance Group Team today to schedule an appointment.