Homeowners insurance, simply referred to as home insurance, is not only want but something you definitely need. This is not only because of the risk of property damage or theft. Loan or financing companies normally check if there is insurance coverage for your property before they decide to extend a loan.
It does not only protect you from damages or theft, home insurance also allows you to build better value and credibility for your home. There are three basic levels of coverage that exist.
The first one is the actual cash value. It basically covers the cost of the house including the value of your belongings after the deduction of the amount of your property’s depreciation.
The second one is the replacement cost. It covers the actual cash value of your home including the possessions without the deduction for depreciation. This is for you to be able to repair or rebuild your home up to its original value.
And finally, the extended replacement cost or value. This policy pays for whatever it costs to repair or rebuild your home. Know more about the basics of homeowners insurance by watching this detailed video.