Homeowners Insurance – What Types are Available?

When it comes to homeowners insurance policies and coverage, homeowners have several options to choose from.  Whether a home is located in Seattle or any other city in the U.S., it is important for them to find the policy that will be able to properly protect their home.

Insurance policies can be very different depending on whether the home is owned or rented.  Additionally, insurance policies will also differ in the amount of coverage they provide and in the things they cover.  For the most part though, homeowners insurance policies are relatively standard across the country.

There are a little over a half dozen types of coverage available for individuals who either rent or own their home.  Regardless of the type of coverage that a person chooses for their home, rented or owned, residents are typically given three options related to how an insurance claim might be handled when it is filed.  The first option is often referred to as the actual cash value option.  A homeowner in Seattle or anywhere else in the U.S. who chooses this option will receive a payment for the value of the home and the possessions in the home if a claim is ever filed, minus a slight deduction to account for depreciation of value.

The second option that homeowners can choose from is known as the replacement cost option.  Residents who elect this option will often receive the cost of repairing or replacing the home and/or the possessions without any adjustment to account for depreciation.

The third and final option that a homeowner can select in terms of how to handle specific claims of damage to their home is known as the guaranteed replacement cost.  This particular option in terms of insurance policies gives homeowners the highest possible protection for their home.  This type of policy will actually pay whatever it costs to rebuild a home the way it was before it was damaged as a result of a fire, flood, or other disaster.  The beauty of this type of policy is that it will cover the damages to the home even if the replacement exceeds the limits of the policy.  As a result, a policy of this type can help a homeowner account for rising home repair and labor costs that may occur after a disaster.  These types of policies are not available for some older homes, and are also not available in all states and from all insurance providers, as they often do not provide coverage for upgrades that may be required by local housing codes.

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