What Does Replacement Cost Mean In Home Insurance? 
Simply stated , `` Replacement Cost '' is the estimated amount that it would cost to replace your home to the condition that it was prior to a covered loss , using materials of like kind and quality and subject to current building codes . It is a good idea to factor in the cost of demolition as well , since if there is a loss , all or a portion of your current home may have to be leveled in order to prepare the sight for reconstruction . 