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What should I know about replacement cost policies for your home?

The costs of replacing your home will be covered with replacement cost insurance policies. Many consumers are skeptical about purchasing this type of coverage.

However, it is important to know that including this coverage under your policy will help prevent major costs from making a serious dent in your wallet.

This coverage can be purchased and added to your policy very easily. If you want to know more information about replacement cost coverage, don't hesitate to call your home insurance company and talk to them about it.

If you are convinced and persuaded enough to make the decision and finally purchase replacement cost insurance, then you can do so by making a simple phone call to your home insurance company. Ask more about what this coverage will offer and its benefits.

Keep in mind that some insurance companies will refuse to pay policyholders for a general contractor's overhead and profit (o&p). O&P is usually 21 percent of the estimated material and labor costs when policyholders decide not to rebuild or repair their homes.

Harvey Lewis, a claims expert in Oklahoma City, claims, "Some insurers have taken the attitude that, 'If you don't rebuild, you're not entitled to O&P.' But the insured is paying an extra premium for the replacement cost coverage and, therefore, the insurance company owes the contractor O&P to the policyholder whether they make a replacement or not.'

O&P is owed on all home replacement cost claims, according to the Departments of Insurance (DOI) in Colorado and Texas.

Many consumers have no idea that they are entitled to overhead & profit, mainly because they do not know what it is. Frankly, no one is going to tell them and persuade them that they are entitled to another feature.

There is yet another argument lingering in the insurance industry. Insurance companies believe that it isn't fair for consumers to receive o&p when they don't intent to rebuild or replace their property after a disaster. Insurance companies claim that this would be a wais and an "unjust enrichment'.

However, insurance companies very well know that the consumer has been paying for replacement cost coverage on a regular basis, therefore, they deserve this o&p. This argument has been going on for quite along period of time, but it is obvious that the consumer will win.

By: www.2insure4less.com

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