Heath Ritenour on Home Insurance Policies
In April 2021, the United States Census Bureau released homeownership statistics. The report stated that 65.6% of Americans own their homes. Owning a home is enabling many Americans to protect their investments.
To protect one’s investment, it is important to understand how homeowner insurance works. Heath Ritenour, CEO of Office of America, shares key concepts that apply to homes’ type, size, and value. Every homeowner’s situation is different; thus, the policies they choose differ as well.
How Important Is A Homeowner’s Insurance?
According to Heath Ritenour, homeowners insurance serves the following purposes:
1. It Protects the Homeowner’s Investment
The policy pays for disasters such as fire outbreaks. It also pays for repairs or replacements of the home within its coverage limits.
2. Mortgage Company Approval
If a person decides to buy a home using a mortgage loan, they should provide proof of homeowners insurance. This enables the lender company to protect its investment.
A mortgage lender requires hazard coverage, and it should match the amount of loan given. The hazard coverage varies by location and age of the home. To determine the amount of insurance, lenders compare a home’s replacement cost with its current market value.
Levels of Insurance Coverage
Heath states that Homeowners should choose the three levels of insurance coverage. An expert insurance agent should explain the advantages and disadvantages of each level. Below are the three levels of insurance coverage:
1. Guaranteed Replacement Cost
This method pays for the entire cost of repairing a home. It applies even if costs exceed the policy limit.
2. Actual Cash Value
Actual cash represents current value rather than the original cost. It is based on the current value of a home and its possessions after deducting depreciation.
3. Replacement Cost
This method involves the actual cash value and has no deduction for depreciation. The homeowner will be able to repair and rebuild the house to its original cost.
Insurance covers investment from loss, theft, and personal liability or harm to others. Heath Ritenour believes that investing in a good insurance policy helps to protect the investment.