When it comes to your possessions, owners of high-value homes are always concerned that they get enough insurance coverage for homes filled with expensive personal items.
Not only that, high-value home policies cover your dwelling for all risks, versus a standard home insurance policy covers your home for a limited amount of risks (“named perils”), such as fire and lightning.
Although you can generally choose to insure your possessions under “actual cash value” or “replacement cost” coverage with a standard policy. High-value home insurance policies generally include replacement cost automatically. They also typically provide higher coverage limits for valuable items such as jewelry.
Replacement cost coverage is better because it reimburses you for new items to replace the damaged ones—such as a new bedroom furniture set. Actual cash value would give you only the depreciated value of the furniture, which leaves you short when you want to buy new items.
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