Extended Replacement Cost and Guaranteed Replacement Cost Coverage

When you purchase a home or commercial property, selecting the right insurance coverage is one of the many important decisions that must be made.

With the price of building materials skyrocketing, along with increased demand for new construction – how can you be sure that your policy will cover the total cost to rebuild your property in the event of a loss? What happens if you are only covered for $750K, but the cost to rebuild your property is $900K? This is a common question for property owners, especially after a total loss.

Many insurance policies contain Extended Replacement Cost or Guaranteed Replacement Cost Coverage. But what are the differences, and how can they be applied to your claim?

Guaranteed Replacement Cost Coverage

Generally, Guaranteed Replacement Cost Coverage means the insurer will pay the full costs to rebuild or repair your property, even if the costs exceeds your stated building limit within your declaration pages. The way that these additional funds are released depends on the language in the policy and can have specific stipulations. Occasionally, this kind of coverage will even cover you if you want to rebuild in a different location.

Extended Replacement Cost Coverage

Another option that you may be able to take advantage of is Extended Replacement Cost, which provides homeowners with additional funds when the cost of damage exceeds the amount in your policy. The difference between Extended Replacement Cost and Guaranteed Replacement Cost Coverage is that they usually have a limit, likely a percentage of anywhere from 10% -50%.

Luckily, you have the right to hire your own insurance adjuster, called a Public Adjuster, whose job is to evaluate your policy to make sure you are receiving all the benefits that your policy provides and can identify any policies for additional coverage.

Have questions about your property insurance claim? Feel free to contact Stark Loss for more information about how a Public Adjuster can help.

Want To Level The Playing Field?

Stark Loss Consultants works for you to ensure you get a Maximum Claim Payment from your insurance company.
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