Take Time to Understand Your Insurance Coverage

Owning a home in the Amelia Island and Fernandina Beach area of Florida is a dream for many people. But with that dream comes the responsibility of protecting your investment with the right homeowner's insurance.

One of the most important decisions you'll make when choosing a homeowner's insurance policy is whether to choose replacement cost coverage or actual cash value coverage. Here's a closer look at both options so you can decide which one is right for you:

Replacement Cost Coverage

Replacement cost coverage is the most comprehensive type of homeowner's insurance coverage. It reimburses you for the cost of rebuilding or repairing your home to its pre-loss condition, regardless of its current market value.

For example, if your home is worth $700,000 and it burns down, replacement cost coverage would pay for the cost of rebuilding your home to its original condition, even if the cost of construction has increased since you bought your home.

This type of coverage is ideal for homeowners who want the most comprehensive protection for their home. It's also a good choice for homeowners who live in areas that are prone to natural disasters, such as here in the Fernandina Beach and Amelia Island, FL area that is at risk of hurricanes and floods.

Actual Cash Value Coverage

Actual cash value coverage reimburses you for the depreciated value of your home. This means that the reimbursement amount will be reduced to account for the age and wear and tear of your home.

For example, if your home is worth $700,000 and it burns down, actual cash value coverage would pay you the depreciated value of your home, which may be less than $700,000.

This type of coverage is typically less expensive than replacement cost coverage. However, it doesn't provide as much protection. If your home is old or has a lot of wear and tear, you may not be reimbursed enough to rebuild your home to its pre-loss condition.

Which Type of Coverage is Right for You?

The best type of homeowner's insurance coverage for you will depend on your individual circumstances. If you want the most comprehensive protection for your home, then replacement cost coverage is the best option. However, if you're looking for a less expensive option, then actual cash value coverage may be a better choice.

Here are some factors to consider when making your decision:

• The age and condition of your home
• Your budget
• Your risk tolerance
• The location of your home

If you're not sure which type of coverage is right for you, talk to a trusted insurance broker. They can help you compare different coverage options and find the best plan for your needs. 

As a top realtor in Amelia Island and the Fernandina Beach, Florida area, I would be happy to connect you with an insurance broker who can help you compare different coverage options and find the best plan for your needs. Contact me today to learn more.

ABOUT TOP FERNANDINA BEACH REALTOR COLLEEN GERKE
Colleen Gerke is a Top Producer Realtor in Fernandina Beach, Amelia Island, Yulee and the surrounding Northeast Florida area. Colleen has a top 5-Star rating on Zillow, Yelp, Realtor.com and Facebook. She strives to be the best real estate agent you’ve ever worked with! Whether you’re looking to sell your house in Fernandina Beach, move to Amelia Island, or add a Florida property to your rental portfolio, you’ll have a stress-free real estate experience when you Close with Colleen.