An example of a covered risk might be damage caused to your roof from the ice buildup in the gutters. Some of these policies offer optional guaranteed replacement cost coverage on your home and its contents. Replacement cost coverage will pay to rebuild your home and replace its contents with no depreciation coming into play. It is important to understand that the replacement value of your home is based on your insurance company1s estimate of the cost to rebuild your home on your property. It is not based on the purchase or appraised value of the home.
Most policies have a built-in annual increase of replacement cost coverage.
You may want to insure certain valuables such as jewelry, furs, silverware, camera equipment, and art as an addition to the basic homeowner1s policy. This addition is called a personal property schedule. A schedule provides a specific amount of insurance for each valuable on an itemized basis. It can provide replacement value coverage with no deductible and covers almost all types of losses. For your own protection, it is a good idea to keep a complete inventory of everything you own in a safe deposit box.