Dady Insurance Blog

When considering the number of options regarding homeowners insurance, Austin residents may decide between taking out actual cash value or replacement cost coverage for items. However, the policyholder should be clear in their mind which form of replacement of their lost or damaged possessions they have taken out, as this may affect the amount of payout they receive.

The difference between actual cash value and replacement value is that the former takes into account the age and wear and tear on an item before the payout amount is decided upon. An example of this would be the loss of a $1000 television set: an actual cash value policy would take into account the age of the TV in the amount they pay to the policyholder whereas a replacement cost will pay you the original price of the TV.

While an ACV policy is generally cheaper, and therefore an opportunity to save money on homeowners insurance, Austin residents may think that the extra money paying for a replacement cost package may be worth considering. Whichever policy you decide to buy, it is important that the insurance is suited to your needs. Talk to one of our agents for further information!

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