1Will the policy cover the market value of the house or replacement value?
When you buy a home, you want to make sure it’s protected along with everything in it. Since it will probably be the most expensive thing you’ll ever purchase, it’s imperative that you have homeowners insurance. But how do you make sure you’re protected for everything that should happen to your home throughout the years you’ll own it?
You need to shop around and be sure to ask a lot of questions about what the policy has to offer, to make sure you get just what you need to keep your investment safe. Here are the questions you should ask your insurance agent about any potential home insurance policies you are going to purchase.
1. Will the policy cover the market value of the house or replacement value?
You want to know what should happen should the house be completely destroyed. If it pays market value, that means you get paid whatever the house would cost in the current economy prior to the loss. If you get replacement value, you will be paid whatever it costs to actually replace the house. Having the house rebuilt exactly as it was could be considerably more than the market value.