How Homeowners Insurance Works


When you’re looking for home insurance in Sugar Land, you don’t need to feel overwhelmed at all the options. An easy-to-understand guide ensures you know exactly what you need to protect your home and your belongings.

Insuring Your Home’s Structure

There are three types of homeowner’s policies that you can get to ensure your home’s structure. Some people choose to insure the actual cash value of their home, which is the cost of replacing its value minus depreciation. Others choose replacement cost, which is the amount paid for damaging property. There is no depreciation deduction, but there is a maximum dollar amount. Finally, there is the extended replacement cost, which covers up to a specific percentage over the cost of the home. It is typically 20% and covers situations such as an increase in the cost of construction.

Insuring Your Personal Belongings

Your home’s structure and the belongings that you have in it are two different things, so you’ll want to make sure you have a policy that covers both (or two separate policies). When insuring belongings, you can choose between the cost of replacement and the actual cash value. The cost of replacement provides items of similar kind and quality with no depreciation deduction. The actual cash value provides cash after depreciation. Most policies use the actual cash value as their method of payment.
Transparity Insurance Services recommends comparing several home policies to determine which one fits into your current budget as well as provides you the most coverage when you need it.