By Acuity Insurance

Sometimes insurance terms can be confusing. When it comes to something as important as protecting your home, we want to make things easier to understand. We’ll explain some of the differences among homeowners insurance policies and why coverage with Acuity is a no-brainer.

No matter what insurer you have, there is coverage for your home. Insurance companies often refer to it as the coverage A – dwelling, or you can just refer to it as your home limit. If your home is severely damaged or a total loss, this is the amount you could receive to rebuild. Some things to consider include:

Do you have enough coverage? It is important to remember that this number is not the market value of your home. What your home would be worth in a sale is different than the cost to replace it. Keep this in mind and always make sure you have adequate coverage.

Maintaining adequate coverage makes a difference. If you do not properly insure your home, you could be left footing the bill after a total loss. If your home is underinsured, you face the risk of not having enough coverage to rebuild your home as it stands today.

What are some differences?
• Replacement cost coverage, which is offered by many insurers, is intended to cover the cost to replace with similar materials.
• Functional replacement cost will pay for repairs but may use less expensive materials that function in the same manner. This is common for older or historic homes with expensive or obsolete materials.
• Acuity also offers guaranteed replacement cost, which will pay the cost to repair or rebuild—even if it costs more than you are insured for—with no cap! Other companies may cap this benefit at 15-25% more than the policy limit.

Why is guaranteed replacement cost important? If you think about what it takes to build a home, the cost of materials and labor often comes to mind. With Acuity’s guaranteed replacement cost endorsement, some of the concerns of going over budget due to increased labor or material costs can be eliminated.

We encourage you to review your homeowners insurance and consult with a licensed professional to closely evaluate your individual needs.

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