Guaranteed Replacement Cost
Guaranteed replacement cost is a homeowners insurance feature that helps pay to rebuild or repair a covered dwelling even if the cost is higher than the policy limit, up to the insurer’s terms and conditions. It is designed to protect against rising construction costs after a loss, but it may only apply if certain policy requirements are met and may not be available in every state or policy.
After a major fire, rebuilding the home costs more than the dwelling limit on the policy, but guaranteed replacement cost helps cover the extra amount needed to complete the repairs.
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