I am debating about whether it makes sense to buy an optional extended replacement cost coverage on my homeowners policy. What are the requirements to obtain such coverage?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: May 10, 2010

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Insurance Question from Anaheim, CA

Asked on 05/10/2010

I am debating about whether it makes sense to buy an optional extended replacement cost coverage on my homeowners policy. What are the requirements to obtain such coverage? NULL

Answer given on May 23, 2010

The first requirement is to find out if your insurance company offers this option, as not all companies do offer this coverage.  Extended replacement cost offers 20% to 25% more than the limit of your home on the policy.  For example, if your home is insured for $200,000, having extended replacement cost will provide you with an additional $40,000 or $50,000 in the event of a loss.  This can be beneficial if there is a catastrophic loss which creates a shortage of building supplies or available contractors. If your insurance company does offer the coverage, have them provide you with a quote with and without it, since you will pay more to have the coverage.  You can then weigh if the additional premium is worth it to you for the extra coverage.

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