What is Extended Replacement Cost Coverage?
Posted: 10/26/2009
Extended replacement cost coverage is designed to pay the insured a certain amount above the regular limit in their policy to replace a home that has been damaged. The amount is generally between 120 to 125 percent. Extended replacement cost coverage is similar to guaranteed replacement cost, accept that guaranteed replacement cost has no percentage limits. When a major disaster strikes and you are forced to deal with the high demand for materials and contractors, all with a higher reconstruction cost, policies such as guaranteed and extended replacement cost insurance are designed to protect the insured. In many homeowners' insurance policies, the policy may limit building cost track inflation.
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