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Guaranteed Replacement Cost Coverage

Replacement Cost

​Pays for replacement without reduction for depreciation. Be aware of “same site” requirements in your policy that specify you must rebuild at the same location.

With property values rising across Canada, it can be difficult to estimate the replacement value of property from year to year. Guaranteed replacement cost coverage (building)* pays for replacement without reduction for depreciation. The endorsement covers any shortfall if the replacement cost has been underestimated. To use this coverage, you are contractually obligated to maintain a coverage amount that:

  • Is not less than 100% of the cost to replace the dwelling building.

  • Is not reduced from the replacement cost derived from a valuation program.

The insurer will be advised within 90 days of the start of the work if any improvement, extension or addition to the building.

Guaranteed replacement cost coverage permits you to rebuild or replace your property, even if the damage exceeds your policy’s limits. This is why it’s important that your home’s insurance value is current and correct. Some replacement cost coverage has a “same site” requirement. This means the coverage only applies to rebuilding at the same location.

If the cost of rebuilding your home has increased in recent years, talk to your insurance representative about getting your home insurance valuation updated.

When you renovate your property, you add value to it. Talk to your insurance representative before you start. With most insurance policies, you are contractually obligated to inform your insurer of any improvement, extension or addition to your home within 90 days of starting the work. Learn how to be certain your renovation project, dwelling and contents are appropriately insured.



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