Home Insurance: Replacement Costs Versus Cash Value

When you buy a home, you are making an investment in your future. To protect your home, you’ll need to buy home insurance. If you live in or near Highland Village, TX, our Thompson Insurance Services team would love to meet with you and help you find the right home insurance policy.

Replacement Costs Versus Cash Value

When you’re shopping for home insurance, one of the important things to clarify is whether the policy is offering payouts with replacement cost or with cash value. These terms refer to how the insurance company will calculate the amount to pay you after your home is damaged. According to the Texas Department of Insurance, these terms will make a big difference to you when you need funds to repair or replace your home. 

Most insurance companies will pay you the current cost of rebuilding or repairing your home. This practice is referred to as replacement costs, and it is the standard method by which home care claims are paid. However, some policies are now offering “cash value” settlements for your home’s damages. These policies typically cost less to purchase, but most of them will also pay you less, since they include the home’s age and depreciation into the amount they will pay you.  

Call Us for Your Appointment Today

All homeowners are not alike, so every home insurance policy should be unique. Our team at Thompson Insurance Services will take the time to make sure you have the home insurance that you need. Clients in the Highland Village, TX area can rely on us for professional insurance advice and customer service. Call us for an appointment today and protect your home with a policy that’s right for you.