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Replacement Cost Insurance

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Replacement cost insurance
Insurance that pays out the full amount required to replace damaged property with new property, without taking into account the depreciated value of the property.

Replacement Cost Insurance
An insurance policy in which the insurer will pay the entire cost of replacing the insured asset in the case it is damaged or destroyed. That is, there is not maximum benefit on the policy; the insurer simply pays the replacement cost regardless of what it is. Importantly, a replacement cost plan does not take depreciation into account.


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When you buy your policy, you will have to choose from replacement cost insurance and cash value policies.
Fannie Mae guidelines require replacement cost insurance and assign the responsibility to the lender to ensure that the homeowner obtains insurance in compliance with Fannie Mae guidelines.
This webinar will be hosted by Kathy Taub, member, Arent Fox, who specializes in structuring recently testified as an expert witness on construction contracts in the replacement cost insurance proceedings for the World Trade Center complex.
 
 
 
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