Policy Types

Charles Goodman Group: Friendly Chappaqua Insurance Broker

Homeowners should not be afraid to sit down and speak with a Chappaqua insurance agent when determining the amount of insurance that they will need to adequately protect their home. A good question to ask the agent is, how much insurance is enough?

There are many factors that will determine the answer. These include the size of the home, the value of the possessions inside the home and the cost to rebuild the same home in the same location. Homeowners should speak to their agent about inflation protection in regards to their policy.

Many types of homeowners insurance exist to meet the diverse needs of homeowners. Replacement coverage provides a homeowner with sufficient funds to replace damaged items that were covered by the insurance policy. With actual cash value policies, homeowners will receive compensation based on the current value of the items that they own minus depreciation. Special payment arrangements allow for financial compensation before the damaged dwelling is repaired or rebuilt, or lost possessions are replaced.

Functional replacement cost, also known as market value coverage, will cover replacements that are made using non-exotic materials and common construction methods. No deduction for the depreciation of the home is made unless the homeowner chooses not to make repairs.

The insurance agent experts at the Charles Goodman Group of Chappaqua can assist you with any questions regarding life insurance or automobile insurance.

In the case of a total loss, homeowners would be reimbursed for the current market value of the home.

Stated value policies dictate an established value for the home when the policy is created. Any reimbursement the homeowner receives is limited by the value established in the policy.

Different policies deal with loss settlement in different ways. A policy that provides replacement cost is not the same as one that bases compensation on the market value of the home. Replacement cost coverage is designed to replace lost or damaged property regardless of its market value. There is typically no allowance for depreciation in this arrangement.

Conversely, actual cash value replacement does factor in depreciation and may not provide sufficient funds to replace a lost, stolen or damaged item. Functional cost or market value coverage is designed to repair property using commonly available materials and construction methods. For example, a home that is damaged that had plastered walls could be replaced with drywall because, in most places, drywall is a common construction material that is installed using a basic construction practice.

There is a wide range of homeowners insurance policies available. Every single one has its pros and cons and is designed to meet the needs of a specific homeowner. For this reason, it is a good idea to speak to an insurance agent to make sure that the policy selected is right for your circumstances.