What are different types of homeowners insurance coverage?

Actual cash value


This type of homeowners insurance covers the loss or damage of property (including personal items) after deducting depreciation – meaning how much the items are currently worth, not how much was originally paid.


Replacement cost


With replacement cost coverage, items lost or damaged are replaced without considering depreciation so that repairs and replacements can be made according to the original value spent.


Guaranteed replacement cost


Also known as extended replacement cost, this type of coverage will pay all costs needed to repair or replace lost property – even if it exceeds the policy limit. Some companies offer this type of coverage but typically cap it at 20-25% higher than the policy’s limit.