What To Consider When Buying Homeowners Insurance, Apartment Insurance or Condominium Insurance

It’s easy to underestimate the contents of your home.  What would it take to replace everything you own if you had to?  The answer is: a lot more than you probably realize!  Things like furniture, clothing, electronics, appliances … the list goes on and on and the dollar amounts add up quickly.  If you had to go out and buy everything new all at once – it would cost quite a pretty penny.  When shopping around for homeowners insurance quotes, you simply cannot make a decision based on “the cheapest homeowners insurance quote” -you want to be sure that you know what you are getting and that you are getting enough to know you are covered.

With respect to the contents of your home, apartment or condominium, all homeowners insurance is not created equal.  There are different types of coverages, so make sure you know what you are getting.  “Replacement coverage” might be a little more expensive, but it will cost you far less in the long run.  Replacement coverage is what it sounds like – in the event of a covered loss, the insurance company will cover the amount it costs you to replace the items you’ve lost with items of equal value.  For example, if you purchased a 42 inch television in 2005 that now needs replacement due to a covered loss such as a fire, the insurance company will pay what it costs you to replace that television with a new one that you buy today, as opposed to the depreciated value of the item.  This can add up quickly.  If you spent $2,000 in 2005, but the now used TV would only be valued at $1,200 after depreciation, you’d end up being out $800 if you have to spend $2,000 again now to replace the TV.  Thus, although you’ve insured the TV, if you don’t have replacement coverage on your homeowners insurance policy, you’d still be out of pocket money to replace your TV.  However, with replacement coverage, the TV would be insured to its full value that it costs for you to replace it with a TV of the same size and quality.  Similarly, if you got a great deal on a sofa on sale, but would now have to pay full price to replace it, if you have replacement coverage, the insurance company will pay the full amount it costs you to replace the sofa at the current cost, as opposed to reimbursing you what you had paid for the sofa on sale or the depreciated value of the sofa.

When buying insurance for your home, apartment or condominium, don’t forget to take into account what it will cost you to replace the contents.  Although replacement coverage may cost more now, it will cost you far less in the long run if you have a major loss.  Buying replacement coverage buys peace of mind.  When shopping around for insurance for your home, apartment or condominium, make sure you are comparing apples to apples – make sure when you are comparing policies, that the policies you are looking at have the same types of coverage.  And remember it is well worth your while to consider replacement coverage. If you are in the market for homeowners insurance and would like a comparison or rate quotes, start with www.einsurance.com.


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