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When a homeowner faces a loss, it is devastating, both emotionally and financially. With adequate home insurance, however, many losses will be covered and the owner can worry a little less. Here are three types of coverage to think about when looking for a plan. Replacement Costs There are three types of replacement policies available through home insurance plans. Each provides different levels of coverage, with some covering more expenses than others. Guaranteed Replacement The best coverage available offers guaranteed replacement. This type of coverage pays for the full cost of repairing or rebuilding the house. A home insurance plan that provides guaranteed replacement is best suited to people who would want to repair or rebuild their house exactly as it was before it was damaged and who do not want to put up any of the money for it. On the other hand, coverage for guaranteed replacement is pricey and does not fit into every owner's budget. Replacement Cost Another option in coverage is that of replacement cost. With this type of coverage, your insurer, or sometimes a professional estimator, determines the cost of repairing or rebuilding your home should it be completely destroyed. The estimate is calculated in different ways depending on the situation: some estimates are based on the market value of the dwelling, the cost per square foot of rebuilding in that area, or the cost of adding high-dollar-value improvements to the dwelling. Once the estimate is calculated, the plan will pay no more than the estimate, even if the expenses incurred exceed it. Cash-Value Another option for replacement coverage is a cash-value policy. This type of plan will take depreciation into account and subtract that value from the replacement expenses. This is an affordable option, although it usually does not come close to covering the full expense of repairs or rebuilding; still, it is better than nothing. Additional Coverage Besides replacement costs, the following coverage can help people get by if their house has been damaged. Loss of Use Unfortunately, families that are unable to live in their house while it is being repaired or rebuilt face increased living expenses, increased food expenses, and increased commute costs. Fortunately, with the right plan, the owner can recover some of these losses. Loss of use reimbursement, which is available on most home insurance plans, reimburses the owner for these additional expenses. Valuable Articles Most owners do not realize that their home insurance often does not cover the full value of expensive personal items, such as jewelry, coin collections, and sound systems, as well as hunting, camping, and sports equipment. They are surprised that there is not enough money to replace these things when disaster strikes. Most regular policies cap the amount paid out for these items. A regular policy doesn't always cover the cost of replacing such items. Purchasing a valuable articles policy ensures that their replacement is covered when the value of the damaged items exceeds the amount covered under the regular policy, or in situations where the loss did not occur during an event covered by the regular policy. Attention homeowners in Bloomfield Hills: home insurance policies are available from http://www.philkleininsurance.com/homeowners/default.aspx.
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