Why the distinction matters
Actual cash value can leave a larger portion of a repair bill with the property owner because depreciation is deducted. Replacement cost can provide a higher settlement for a covered loss, but the policy may require repairs or replacement before withheld depreciation is paid.
Check the roof separately
Roof settlement terms deserve their own review. Texas regulators note that some policies pay replacement cost while others reduce roof payments based on age and condition. Ask whether roof coverage changes at renewal and whether a separate wind or hail deductible applies.
Questions to ask before choosing
- Is the dwelling settled at replacement cost or actual cash value?
- How is the roof settled?
- Does personal property use the same valuation method?
- What deductible applies to wind and hail?
- Are there endorsements that change valuation after a certain condition is met?
For landlords and vacant property
Rental, vacant and changing-occupancy properties may use dwelling forms or specialty policies with different settlement provisions. Compare the actual form offered for the property rather than assuming homeowners-policy terminology carries over unchanged.
Need help comparing Texas property coverage?
Insurance Plus can review available homeowners, landlord and vacant-property options and help you identify the valuation and deductible terms that deserve attention.