Actual Cash Value Home Owners Insurance- Do You Need It Really?

insurance coverage for mobile homes

Why Might You Need Cash Value Home Insurance?

Actual cash value homeowners insurance?  Cash value homeowner insurance cover the actual value of your property. Do you need it? Probably, and not only for expensive elements such as the physical structure of your home but also for the contents of your home (should your insurance cover it).

Appliances often don’t last much longer than their warranties allow. Replacing microwaves and imploded television sets every so few years, is a normal part of life.

The bottom line? Owning a home is an expensive business. The more you can protect yourself against all those unforeseen little accidents, the better. Taking out actual cash value homeowners insurance should protect you from the brunt of the disaster.

When taking out insurance, you will be faced with scores of jargon flowing throughout the contract, and some phrases might be difficult to understand when your broker tries to explain them with even more jargon. One of the phrases bound to pop out at you is ‘Actual Cash Value’.

But what is it, how does it affect you; and how do you determine the actual cash value of your insurance? Here’s a short explanation:

Actual Cash Value Homeowners Insurance – What is It?

Actual cash value homeowners insurance, as opposed to replacement cost insurance, refers to the reimbursement of the depreciated value. This basically means that you will receive a sum of money that reflects the current value of your dwelling, your shed, or for example your treadmill if it breaks down, if your home insurance covers it that is, rather than the new price.

Let’s continue with the example of the broken treadmill. Say the average ‘mill lasts for about ten years. After three years of using it the treadmill breaks. That means that the treadmill still had about 70% of its life left and that you used up about 30% of it.

Now, take into account its replacement value. If you were to replace that treadmill now, its current cost would run at $3500.

Make Sure that Your Coverage Includes Liability Insurance.

Homeowners insurance is not a debatable issue. Having it, places a protective blanket over your home and its contents, and it takes out a lot of the stress from an accident or disaster (not all, of course – nobody likes to get rained on in the living room while waiting for the roof to be repaired). Even something small like the nuisance of a broken toaster can be taken care of in a heartbeat (depending on the company and policy you choose).

Types Of Insurance Needed For a Mobile Home.

Many different types of home insurance policies are available. Depending on your needs and wishes you can include specific options such as natural disaster coverage for example. In this case you should know that damage from earthquakes is typically not covered. Most home insurances also cover personal injuries that happen on your property if you are liable. These are just some of the things you should look into when getting home insurance. Naturally, the more coverage you want the higher your premiums will be.