Insurance Glossary

Guaranteed Replacement Cost

Property

Definition

The most comprehensive coverage that pays whatever it costs to rebuild your home to its original condition, even if it exceeds your policy limits, regardless of construction cost increases.

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Related Terms

Extended Replacement Cost
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.
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.
Flood Insurance
Specialized insurance coverage for property damage caused by flooding, typically not covered by standard homeowners insurance.
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