It seems that my current homeowner's policy is a Replacement Cost Policy. It has "inflation coverage". The coverage goes up 4% each year. The premium also goes up each year.
My agent told me that the alternative is an Actual Cost Value policy.
This policy is for the house I currently rent out. I plan to rent it out for at least the next 5 years.
The house is 118 years old, and is about 720 square feet.
So, which kind of policy should I have: RCP or ACV?
Thanks in advance!
Do you have a mortgage on the house? What would you plan to do with the property if you had a total loss? Is the roof updated? Siding updated?
Most people carry replacement cost, as it provides much better coverage than ACV. Insuring at ACV will also put you into co-insurance penalty areas when you have a hail claim and need a new roof, so you'll have some out of pocket costs associated with it. However, the premium savings might be worth it.
Did you have him quote it both ways?
Great questions--thank you!
Yes, I do still have a mortgage on the house.
I should perhaps mention that I might sell the house in about 5 years.
If the house was a total loss, I would probably build again, but it would be something along the lines of a Tiny House.
The (shingle) roof is about 12 years old.
The siding--kind of depends on which side of the house you look at! Three sides have been upgraded. :)
No, I did not get quotes for both options. I will do that.
Thanks!