Home insurance is intended for your protection when some perils happen to your house and valuables inside it. This is your chance of recouping the losses that you may suffer due to damage, theft, or a number of other reasons. Although a standard homeowners' insurance policy covers the structures of the house itself, personal property inside it, living expenses when your house is being repaired and sometimes personal liability. However, it's very important that you study your policy carefully before buying it, as many things you need may not be covered. In order to be more protected you can opt for such endorsements as inflation guard, scheduled personal property (the cost of which may be higher then the limit provided for in your homeowners' insurance policy) and some other ones you can ask your agent about. You surely expect your policy to help you replace damaged and destroyed objects – but if you were not careful enough when buying it, you may end up getting just a fraction of your actual losses covered. Unless your homeowners' insurance policy specifies otherwise, the contents of your home are covered for actual cash value only. What does that mean? That means that, when calculating the amount that you will be paid, the insurance company will deduct depreciation and pay you a lot less than it will actually cost to replace the damage. There is another option that may be more costly – replacement lost coverage, when the insurance company will pay the money it will cost to actually restore damaged possessions and no depreciation will be deducted. Replacement cost coverage is most often an additional option, while actual cash value is a standard language for most homeowners' insurance policies. If you are looking to save money on your homeowners' insurance policy – the best way to go is surely the first option, as you will have to pay less monthly. However, replacement cost coverage is recommended by most agents to make sure you will not have to think how to replace the damaged objects using the little money you have been paid. Covering the gap between the cost of replacing an item that has been damaged and the one you buy instead can be pretty painful. Additionally, the longer you own your house – the more serious this issue becomes, and the less money you will get in case your valuables or your entire house can be damaged or destroyed.