The confusion seems to be replacement VALUE (market value) and
replacement COST (cost to rebuild). Some companies will not just write
a check for the replacement cost. They require that you actually
rebuild.


Exactly. If you choose not to rebuild, you will most likely receive Actual
Cash Value: Cost to rebuild house today - depreciation = money you get
less
deductible. For example:

House built in 1953 burns down. Owner chooses not to rebuild. Cost of
rebuild is $130,000(which is the amount the home was insured for) - 50
years
of depreciation. Owner may expect roughly a little more than half for the
dwelling. He can also expect to pay to have the home torn down and hauled
away himself, plus paying all the fees, inspections, tests and whatnot to
make sure the property is safe to rebuild on, etc. Items that the
insurance
company would have picked up had the owner wanted the home rebuilt - to a
point.

This is just in rough-speaking terms, your insurance policy may vary...

My 2c,

Matty

This is totally true. The replacement cost is just that, for replacement.
You can't use it to cash out.
When 2 back to back tornados tore thru here about 6 years ago, about 95% or
more of the houses in the city and surrounding areas were re-roofed, and a
lot had siding damage, etc....
Most of us got say 75% of the estimated cost for the repair, and if that was
what you wanted, you took the money and that was that. Claim done, keep the
money, do whatever. If you wanted to actually fix your house, you used the
75% advance (or whatever the percentage the ins. co. paid, it varied by
company) to get the contractor started. Then you got the final payment upon
completion of the work, and presentation of the final bill the insurance
pays the balance of the claim.

So if you want to replace, they pay the full cost. If you want to take the
money and run, they depreciate.
Dave