When the unimaginable happens and your personal space and biggest investment is destroyed, homeowners insurance is there to protect you from financial ruin. But, the check your insurance company writes will differ depending on the way your policy is structured, so it's important to know the facts.

Actual Cash Value

The first form of home insurance coverage is actual cash value. Actual cash value is equal to replacement cost minus depreciation. Most insurance policies are actual cash value unless stated otherwise. According to Bankrate.com, because of the depreciation, your check will be less than the current cost of replacing damaged property.

Replacement Cost Coverage

The second form of homeowners insurance is replacement cost coverage. A replacement cost policy will repair damages up to the purchased coverage amount, at today's prices with no depreciation. Bankrate says replacement cost insurance runs about 10 percent higher than actual cost value insurance.

Guaranteed Replacement Cost

The third form of home insurance is guaranteed replacement cost. Guaranteed replacement cost is beneficial in hurricane or tornado zones. Widespread disaster can push building supply and construction costs substantially higher. According to Insurance company Homesite, homesite.com, guaranteed replacement cost insurance will get your damaged property fixed even if the cost is 120 percent of the regular building price.

For more information on homeowners insurance, visit www.insure.com, www.bankrate.com, or www.homesite.com.

Eddie Daroza is a personal investor and stock market junkie. Besides contributing content to efinancedirectory, he works on the consumer watch program '7 On Your Side,' broadcast daily on San Francisco's ABC 7. Eddie is also a reporter for PBS's Update News.