Leave a Message

Thank you for your message. We will be in touch with you shortly.

How Does Extended Replacement Cost Bring You Peace of Mind?

Joe Polyak June 11, 2019

How Does Extended Replacement Cost Bring You Peace of Mind?

Now that we have an idea of how much insurance coverage first-time homebuyers need (as explained in our previous video), it’s time to discuss an important part in this coverage: extended replacement cost.

Extended replacement cost is an extra amount of coverage your insurance company provides to help you rebuild your home after a loss. It’s there in case the cost to rebuild your home surpasses the estimated amount. Sometimes, you never know what a rebuild is going to cost until the last nail is hammered down.

When your policy has an extended replacement cost endorsement, it’s defined as a percentage amount. If your policy states that your home is insured for $600,000 and your extended replacement cost is 25%, for example, your insurance company will allow another $150,000 to get the job done if the rebuild costs more than $600,000.


Usually, insurance companies let you choose who you want to rebuild your property, but they won’t give you more money than what’s stated in the contract.

What if contractors offer a bid to rebuild your home that’s more than the amount provided in your policy? In that case, you may have to come up with the extra amount yourself to cover the cost. Usually, insurance companies let you choose who you want to rebuild your property, but they won’t give you more money than what’s stated in the contract.

So, if a contractor offers you a quote for $800,000, you may have to come up with that extra $200,000 yourself if you don’t have that 25% extended replacement cost. If you do have it, the extra amount would only be $50,000. Your insurance company will likely take a look at whichever offer you decide on just to make sure the proposal makes sense.  

Essentially, extended replacement cost brings peace of mind to homebuyers. Not all companies offer it, though, so make sure you talk to your insurance company to find out whether they do or not.

Stay tuned for our next video where we discuss building ordinances. In the meantime, if you have any questions about this topic, don’t hesitate to reach out to me. I’d love to speak with you.  

Recent Blog Posts

Stay up to date on the latest real estate trends.

San Francisco

🔍 San Francisco real estate market update – June 2025

July 10, 2025

The summer market in San Francisco is heating up—and so is buyer competition. June's data shows a continued trend toward a fast-paced, low-inventory environment.

San Francisco

July 2025 Events in the San Francisco Bay Area: Top Things to Do This Month

July 2, 2025

From fireworks by the Bay to garlic-fueled festivities, July in the Bay Area is bursting with iconic summer events, local music, and community celebrations. Whether yo… Read more

Contra Costa Market Update

🔍 Contra Costa Real Estate Market Update – May 2025

June 20, 2025

As we move through the spring season, Contra Costa’s real estate market continues to show signs of competitiveness—despite a modest uptick in inventory levels.

Alameda Market Update

🔍 Alameda real estate market update – May 2025

June 18, 2025

Alameda's housing market continues to reflect high demand and low inventory this May, making it a strong seller’s market.

Santa Clara County Market Update

🔍 Santa Clara May 2025 Market Update

June 12, 2025

As we move through the heart of spring, Santa Clara's real estate market continues to show signs of strength and resilience. Whether you’re considering listing your ho… Read more

San Mateo Market Update

🔍 San Mateo real estate market update – May 2025

June 12, 2025

As we head into the busy spring market, San Mateo’s housing landscape remains competitive. With inventory staying tight and homes selling quickly, both buyers and sell… Read more

San Francisco

🔍 San Francisco real estate market update – May 2025

June 10, 2025

May is shaping up to be a dynamic month in the San Francisco housing market. With steady inventory, quick sales, and strong buyer interest, both buyers and sellers nee… Read more

Bay Area

June 2025 Events in the San Francisco Bay Area: Top Things to Do This Month

June 6, 2025

Summer is officially here in the San Francisco Bay Area, and so is an incredible lineup of events to enjoy! From Pride celebrations to historic races and family-friend… Read more

Alameda Market Update

🔍 Alameda Real Estate Market Update – April 2025

May 29, 2025

Alameda’s housing market continues to hold strong this spring, with low inventory and high buyer demand defining the landscape. If you’re planning to buy or sell in th… Read more

Let’s Talk

You’ve got questions and we can’t wait to answer them.