If a broker uses an evalution program to estimate the replacement value of your home at $150,000, a fire occurs and the cost to rebuild your home is $155,000, the company will pay the $155,000 even though your policy shows $150,000. It is important to ask your broker if you have Guaranteed Replacement cost insurance on your home.

It is important to note that most Replacement Cost Endorsements pay for the cost of repair or replacement, which ever is less. Therefore, if the damaged item can be repaired to its pre-claim condition at a reasonable cost, it would be repaired instead of being replaced.