Homeowner’s insurance is an important form of home insurance that specifically covers a residential property. This insurance protects you if the property you own should suffer damage from a fire, a flood, a lightning strike or a fire caused by a burglar. It is important to own homeowner insurance because without it you may not be able to stay in your home. In the United States homeowner’s insurance rates are relatively high compared to other forms of insurance. To learn more check it out

In general, the replacement cost or the actual cash value pays for damage or loss to the residential property and a policy will pay for a set dollar amount that does not take depreciation into account. One thing to keep in mind when purchasing homeowners insurance is that it is worth every penny in terms of protection. A policy should cover replacement costs for structures such as the home, the appliances, furniture, the lawn and the interior of the house.

When it comes to replacing your belongings in the event of a disaster it is wise to check with your homeowner’s insurance policy to determine the maximum dollar amount that you can claim under your policy. The actual cash value or replacement cost policy limits the payout to the actual cash value of the things that have been damaged or destroyed. Some policies will allow you to choose to claim the value of whatever item was damaged. In this case you would be reimbursed for the full retail price of the item.