Definitions for "Guaranteed Replacement Cost"
Guaranteed Replacement Cost coverage on homeowner's insurance means that your home will be repaired to its value at the time of loss, regardless of the amount of coverage carried. For example, you estimate your home to have a full replacement value of $350,000 and you insure it for $350,000. If you have guaranteed replacement cost endorsement on your policy and the home is lost in a fire and the house costs $370,000 to rebuild, the policy will pay $370,000.
A type of homeowners insurance coverage which pays the full cost to repair or rebuild even if it is greater than your policy's limit (up to a certain percentage). To receive the full benefits, you may be required to have a certain amount of coverage.
Insurer agrees to pay for replacing property without policy limit. Used in homeowners' program.