Homeowners Insurance Lake Charles Louisiana

Call Jeff Davis Insurance at 337-824-4455 when shopping for competitive rates on life, car, business, or home insurance in Lake Charles Louisiana and the surrounding areas.

We have served the insurance needs for thousands of families, individuals, and business owners in Louisiana for more than 50 years!

Online insurance quotes are also available 24 hours per day when you click the below links:

800px-Roselawn-natchitoches-la1Review Your Lake Charles Homeowners Insurance Coverage Annually.

In a previous article we learned why it’s probably not a good idea to buy a home insurance policy based on the current market value. So in other words if is valued at $200,000, it would not necessarily be a good idea to insure it for only $200,000.

Why?

Because it could very well cost significantly more money to rebuild the home in the event of a catastrophic loss!

To receive full replacement cost on your homeowner’s insurance policy insurance companies require you to maintain at least 80% of the current cost to rebuild your home (Check your individual policy some might require 90%).

What is the difference between replacement cost and market value?

Market Value vs Replacement Value.

Let’s assume your home maintains a market value of $200,000 and is 75 years old.  To rebuild your home in its exact condition may cost $325,000 based on current costs!

Your insurance company would require you to maintain a minimum of $260,000 of coverage (At the 80% figure)!

If you were to fall below this insured amount your company will likely only compensate you based on the actual cash value.

What is actual cash value?

Actual cash value is the cost of something subtracting depreciation from the loss settlement, in other words what is it worth?

ACV is based on the fair value of the property at the time of loss. In other words what would someone pay for that property based on the age, condition, and wear and tear of the damaged property?

It’s difficult to give an exact example until you know all the factors present but keep in mind that there can be a huge difference between an actual cash value settlement and replacement cost!

If you can avoid it, you do not want your claim settled on an actual cash value basis!

In our next article we will examine more closely why market value does not equal replacement value with examples.

Need a Great Agent When shopping for Homeowners Insurance in Lake Charles?

Call Jeff Davis Insurance at 337-824-4455 when you want more than a low price on life, car, business, or home insurance in Lake Charles Louisiana and the surrounding areas.

We are open from 8:00 AM to 4:30 PM Monday through Friday. After hours you can use our online rate quote system by clicking the links below:

 

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