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Cravens Warren

Serving the risk management and commercial insurance needs of business. Cravens Warren, founded in 1946, has been serving the insurance needs of... read more

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  • 10011 West Gulf Bank
    Houston, TX 77040
  • Phone (713) 690-6000
    Fax (713) 690-6020
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Replacement Cost - Homeowners Coverage

May 1, 2012

Why do I have to carry so much insurance on my home?

For one thing, we believe you should have an amount of insurance that is sufficient to rebuild your home - probably your largest investment - in the event it is totally destroyed by a fire or tornado. 

In addition, your policy contains what is called an insurance-to-value provision.  This is essentially an agreement between you and the insurance company.  In exchange for your agreement to insure your home for at least a specified percentage of its replacement value, the company agrees to issue the policy for a lower premium than it would charge for a policy without this provision.  After a loss - even a small loss - if the amount of insurance on your home isn’t sufficient to satisfy your part of the agreement, then the insurance company can reduce the amount it would normally pay.