Amount of Coverage
Insurance must cover 100% of the insurable replacement cost of the project improvements, including the individual units in the project. An insurance policy that includes any of the following coverage, either in the policy language or in a specific endorsement to the policy, is acceptable:
- Guaranteed Replacement Cost–the insurer agrees to replace the insurable property regardless of the cost,
- Extended Replacement Cost–the insurer agrees to pay more than the property’s insurable replacement cost, or
- Replacement Cost–the insurer agrees to pay up to 100% of the property’s insurable replacement cost.
For complete details, see B7-3-04, Property Insurance Coverage for Units in Project Developments.