Replacement cost settlement pays you the amount needed to replace your property, without deduction for depreciation, with new property of like kind and quality. A policy with actual cash value settlement, as you might expect, will have a lower premium. In the event of a claim, however, the difference between the two can add up to thousands of dollars. There are additional ways to reduce your premium. Check out the deductible options that the insurance company offers.
Some companies offer generous discounts for a higher deductible.
The deductible is the amount you pay out of your own pocket when you have a claim. With a higher deductible, you share more of the risk involved in insuring property, and you're rewarded with a lower premium. Check to see if your insurance company offers other discounts, such as a masonry or masonry veneer home discount. Such discounts will also lower the cost of your premium. It's a good idea to review your policy every year.