There are typically three basic types of property coverage under your home insurance policy: replacement cost, actual cash value and extended replacement cost.
Replacement cost typically provides coverage for the cost of replacing or repairing the damaged property with materials of like kind and quality.
Actual cash value coverage generally calculates compensation by reviewing the damaged property’s replacement cost minus depreciation.
Extended replacement cost coverage typically pays for the cost to repair or replace the property, even if the expenses exceed the policy limits. You may be able to choose the amount of extended coverage up to 50 percent over your policy’s limit.