What does homeowners insurance cost?
Damage to your home can be some of the most costly losses you will have to cover — homeowners insurance protects you. Prices of homeowners insurance vary and depend largely on the value of your home and the size of the policy. State laws may dictate how losses are to be figured, which means the same insurance company may use one method in one state and a different method in another. The common methods are: • Actual Cash Value: This represents the replacement cost of the item minus depreciation. For example, a new television set may cost $500. If your seven-year-old TV set gets damaged in a fire, it might have depreciated fifty percent. Therefore, you would be paid $250 for that set. • Replacement Coverage: Replacement coverage will cover the cost of replacing an item without deducting for depreciation. So today’s cost for a TV set with features similar to the seven-year-old one damaged by fire would determine the amount of compensation. If it still costs $500 today, that would be the