Insurance Tips: Homeowners Insurance Policies

VIDEO DESCRIPTION

The next two minutes could save you hundreds of thousands of dollars and keep you from being homeless -- unless you already know about "Guaranteed Replacement Cost" coverage.

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VIDEO TRANSCRIPT

Unknown Speaker: If you lose your home, you need to make sure that you have enough money to build it back.

John Doetzer: What you want to do, is determine, what the replacement value of that home is and insure it for its replacement value. If it's a 30 year old home, you want a replacement value equal to what it would cost you today to rebuild a dwelling of alike kind in quality. So replacement cost is the valuation that you want to make sure is on your policy.

Irwin Kramer: If all you are insured for is the actual cash value of your house today, the chances are pretty good, you are not going to have the cash, to get back into your house, should you ever lose it?

John Doetzer: You want to make sure that you purchase a policy with guaranteed replacement cost coverage. The feature I like the best is one that does not have a limit on the multiple of the replacement cost that they will pay. In other words we called that an unlimited guaranteed replacement cost policy. That is your premier coverage in one that we would recommend.

Irwin Kramer: If your homeowners insurance company is not guarantying you enough funds to rebuild your house, then you need to upgrade coverage.

John Doetzer: So, if you insured your home for $250,000 three years ago and today it costs $350,000 to fully replace that home exactly as it exists today and the insurance company hasn't increased or you haven't increased the coverage and a loss occurs today, the insurance company will come in and pay the $350,000. The only condition there is that you have the proper guaranteed replacement cost endorsement on your policy.