Replacement Cost
Also known as: Replacement cost value (RCV)
Replacement cost is the estimated amount to rebuild a structure with similar materials and quality at current local prices — not its market or resale value.
Replacement cost value is the basis for setting dwelling coverage limits. It reflects construction costs — labor, materials, and code requirements — rather than what a buyer would pay, which also includes land and location. A home can have a high market price but a much lower replacement cost, or vice versa.
Underwriters compare the requested coverage limit against an independent replacement-cost estimate to avoid under- or over-insuring. Estimates use building characteristics such as gross living area (GLA), construction type, roof, and year built.
See Replacement Cost and the full picture for any address in one PerilGrid report — PDF and JSON included.
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