DIYbanter - View Single Post

In article ,
says...

I think your making a moutain out of a mole hill here. If the house burns to the
ground you get a estimate from a contractor to replace the house as it was and a
estimate to replace the content. You give that figure to the insurance company
that is the amount of the check is to be written to you minus the deductiable
amount.

*If* you elect to have the home rebuilt, replacement cost coverage will
pay for that. If you don't you will be paid the actual cash value of the
home. (In either case, you're out your deductible, and the maximum
payout is subject to your policy limits.)

For example, one policy I have in front of me specifies, under Loss
Settlement provisions for Dwelling coverage:

"When the cost to repair or replace is more than $1,000 or more than 5%
of the limit of insurance in this policy on the building, whichever is
less, we shall pay no more than the actual cash value of the damage until
repair or replacement is completed.

At your option, you may make a claim under this policy on an actual cash
value basis for loss or damage to buildings. Within 180 days after loss
you may make a claim for any additional amount on a replacement cost
basis if the property has been repaired or replaced."

Exact language will vary somewhat from carrier to carrier, but the
concept is the same -- you get paid replacement cost if you replace
something, otherwise you get actual cash value.

(Assuming of course that you have a replacement cost policy to begin
with. Many homes don't qualify for replacement cost coverage due to
condition, and they can only be insured for Actual Cash Value.)

Disclaimer: Unless you see my name on your policy declarations, I am not
your insurance agent. Policy language varies by company, policy, and
jurisdiction. Read your own policy and call your own agent if you need
specific details of your policy.

--
is Joshua Putnam
http://www.phred.org/~josh/
Updated Infrared Photography Books List:
http://www.phred.org/~josh/photo/irbooks.html