This coverage may only cost a few dollars more on your policy. The insurance company would pay one-half of the cost of replacing the roof. The second method of computing the amount is called the actual cash value. This method is also used to determine how much is paid when personal property is damaged. Cash value means the amount that it would cost to replace an item minus depreciation of the item.
Insurance adjusters have schedules that are used to compute an item's worth when a claim is filed.
New Provisions Inflation-guard endorsements automatically increase coverage from year to year to keep up with inflation. This means homeowners will not be caught with too little insurance if they forget to bring it up to date. This insurance will pay exactly what it costs to replace an item if it is damaged. Some companies may require that a home be insured for full market value to get this type of coverage, but it may be worth it. The worst way to cut policy costs is to underinsure your home.