Guaranteed replacement cost on contents covers your contents for their replacement cost rather an their depreciated cost. In order to prove claims, a complete household inventory is essential. When selecting a policy or an insurance company, use good consumer judgment by comparing rates and benefits. Replacement value is not the same as market price.
Market price includes the land where a home is situated.
Replacement value is the amount it would cost to have the same house built at today's prices. There are several ways to determine this cost. One is to contact a builder and ask for current estimates for building a new house. Multiplying the area in a house times the cost per square foot gives an idea of the replacement cost. However, if the total structure, including the foundation, is destroyed, the policy only will pay the amount for which the house was insured.