What Is Guaranteed Replacement Cost In Homeowners Insurance? 
Guaranteed Replacement Cost is a common term that is sometimes misused by agents . It means that , if your home is destroyed , your insurance company will rebuilt it , whatever it costs with no limit . This was a very common settlement option at one time . Insurance companies began offering it to differentiate themselves and soon , almost every company offered it . Today , it 's not like that . Some companies will offer it , but only to certain properties . Beware this term when it 's thrown around by agents . Some will misuse it to make it seem like they have this when they actually do n't . Today , most companies will offer something called `` Extended Replacement Cost '' or other , similar terms . This means that they will replace your home , even if it costs more that the limit on the policy , but they will only go to an extra 10,25 , or 50 % of the limit . For example , if your home is insured to $ 100,000 , they may pay up to $ 110,000 , $ 125,000 , or $ 150,000 to rebuild it . Some agents will call this Guaranteed Replacement Cost . Beware , there 's nothing guaranteed about it . The bottom line is this : Be smart , get an agent you can trust that 's more worried about covering you correctly than just getting a new commission . 