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Insurance Glossary

Extended Replacement Cost

Property

Definition

Coverage that pays more than the dwelling coverage limit (typically 125-150%) to rebuild your home if construction costs have increased since the policy was written.

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Related Terms

Replacement Cost Coverage
Insurance that pays to replace damaged property with new items of similar kind and quality without deducting for depreciation, resulting in higher payouts than actual cash value coverage.
Dwelling Coverage
The part of a homeowners or renters insurance policy that covers damage to the physical structure of your home, including walls, roof, and built-in appliances.
Actual Cash Value
The repayment value for indemnification due to loss or damage of property; in most cases it is replacement cost minus depreciation.
Depreciation
The decrease in value of property over time due to wear, tear, age, or obsolescence.
Replacement Cost
The cost to replace damaged or destroyed property with new property of similar kind and quality, without deduction for depreciation.
Homeowners Insurance
Insurance coverage that protects your home and personal property against damage, theft, and liability claims.
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