What is the Definition of Extended Replacement Cost Coverage?
Pays a certain amount above the policy limit to replace a damaged home, generally 120 percent or 125 percent. Similar to a guaranteed replacement cost policy, which has no percentage limits. Most homeowner policy limits track inflation in building costs. Guaranteed and extended replacement cost policies are designed to protect the policyholder after a major disaster when the high demand for building contractors and materials can push up the normal cost of reconstruction. (See Guaranteed replacement cost coverage)
Source: Insurance Handbook A guide to insurance: what it does and how it works | https://www.iii.org/
Label: Insurance
Theme: Dictionary of Insurance Terms
Other Questions: What is the definition of Annuity?
What is the Definition of Extended Replacement Cost Coverage?
You can find random definition and meaning of insurance terms below:
Meaning of Risk in Insurance Terms
The chance of loss or the person or entity that is insured.
Meaning of Schedule in Insurance Terms
A list of individual items or groups of items that are covered under one policy or a listing of specific benefits, charges, credits, assets or other defined items.
Meaning of Secondary Market in Insurance Terms
Market for previously issued and outstanding securities.
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