Question

For replacement cost coverage to apply in dwelling policies, the insured must carry insurance at least equal to _______.

Answer 1

In dwelling policies, the insured must carry insurance at least equal to the full replacement cost of their dwelling.

Step-by-step explanation:

In dwelling policies, for replacement cost coverage to apply, the insured must carry insurance at least equal to the full replacement cost of their dwelling.

Replacement cost coverage is a type of insurance that pays to replace damaged or destroyed property with new property of similar kind and quality, without deducting for depreciation.

For example, if a home is insured for $200,000 and is destroyed in a fire, the insurance company would pay the full replacement cost to rebuild the home, even if the cost has increased since the policy was purchased.