When you buy a home, you’re investing in your future. Homeowners need to purchase insurance to protect their investment. Our team at Amy Tounget Insurance Agency, LLC will create a personalized home insurance policy tailored to your unique needs. Our agency has been serving Midlothian, TX, and helping homeowners like you since 2019.
What’s the 80/20 Rule and How Does it Affect You?
When you’re reviewing home insurance policies, you’ll probably hear lots of vocabulary terms you aren’t familiar with. One of those terms is “the 80/20 rule.” According to Kiplinger, this “rule” will make a big difference in how much your insurance company will pay you if your home sustains damage. You might assume that a home insurance policy will reimburse you for the total amount of damage, but this rule could mean that your compensation will be less than you expect.
According to Kiplinger, the 80/20 rule means that to get complete coverage on a home insurance claim, you must buy a policy worth at least 80% of its replacement cost value. (Replacement cost value is the amount needed for materials and labor to rebuild or repair your home, not its real estate market value.) For example, if your home’s replacement value is $500,000, your home insurance policy must be worth at least $400,000, which is 80% of $500,000. If your home insurance policy is for less than 80% of its replacement cost, the insurance company will pay only a portion of the value of your home’s damage claim.
Call Us for an Appointment
Home insurance offers protection after making the major investment of buying your home. Clients in the Midlothian, TX area have learned they can rely on the team at Amy Tounget Insurance Agency, LLC for all their insurance needs. Call us to schedule an appointment, and let’s talk about your insurance options.
