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Extended Dwelling Replacement Cost Endorsement

Updated: Mar 1, 2023

Widespread disasters, inflation, and other factors affecting the economy can push up the costs of materials and labor. Suddenly, your dwelling coverage amount is insufficient, and you are forced to pay the difference out of pocket after a major loss.

The solution? It may be “Extended Dwelling Replacement Cost” endorsement. While your dwelling coverage amount is still set at a specific number, “Extended Dwelling Replacement Cost” endorsement gives you an extra coverage cushion, if your original coverage amount isn't enough, and if you comply with all policy conditions.

For example, an extended replacement cost policy might provide 25, 50 or even 100 percent extra coverage over your dwelling coverage amount. So if your dwelling coverage is $400,000, extended replacement cost coverage would provide an additional $100,000, up to $500,000 total to rebuild your home; but only, if you need it.

What homeowners need to know about Extended Dwelling Replacement Cost

“Since October 2019, lumber prices have dramatically increased by roughly 60%." This leaves insureds at a serious disadvantage after a major disaster because their needs for repairs are much greater and, in turn, they’ll have to pay more.

Choose the right Insurance Policy

Inflation and the COVID pandemic have led to a significant increase in the price of building materials such as lumber, steel, concrete, stone, brick, and masonry since spring 2020. In order to make sure you have the right coverage for your home or commercial building, you must regularly review your coverage limits and discuss all of your insurance needs with your insurance agent.

About the Author

Rabih Hamawi is a principal at the Law Office of Rabih Hamawi, P.C. and focuses his practice on representing policyholders in fire, property damage, and insurance-coverage disputes against insurance companies and in errors-and-omissions cases against insurance agents. He may be reached at (248) 905-1133.

Disclaimer: This post is for informational purposes only. It does not create an attorney-client relationship, and isn't intended and should not be construed as the providing of legal advice.



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