When it comes time to purchase a Putnam Connecticut homeowners insurance policy, you may feel overwhelmed by all of your options. However, when you’re deciding on how much coverage you need, you will likely have to pick one of three standard types. These include actual cash value, replacement cost, and guaranteed replacement cost.


Actual Cash Value


An actual cash value policy will typically pay for what it costs to replace any property that becomes damaged while also factoring in the price of depreciation. For most Putnam Connecticut homeowners insurance policies, the actual cash value standard policy applies unless replacement cost or guaranteed replacement cost has been specified.


Replacement Cost


In comparison to actual cash value, replacement cost covers the expenses of replacing damaged property without taking into account depreciation. However, how much you are able to replace is limited to a certain amount.


Guaranteed Replacement Cost


Guaranteed replacement cost replaces damaged property without factoring in deductions and does not have a dollar limit. This provides you with protection in case construction costs are more than anticipated or other building fees that arise are more than expected due to inflation.


Knowing what type of policy you need to purchase can be a little bit tricky. Talk with your insurance agent to determine what type and how much coverage is essential to protecting the investment you’ve made in your home.