Few things in life are worse than losing your home to fire or a natural disaster.Except, that is, discovering in the aftermath that you don’t have enough homeowners insurance coverage to rebuild the house back to how it was before trouble struck.If you get Guaranteed Replacement Cost (GRC) coverage, that is unlikely to happen.

Why? GRC will pay for the full cost of rebuilding your house back to its previous size and specifications1—right down to the granite countertops, custom bookshelves, and gleaming hardwood floors you love.Why Should I Consider Guaranteed Replacement Cost? “Guaranteed Replacement Cost gives you peace of mind,” says the vice president of product management in ERIE’s home department.“The reality is that it’s almost impossible to estimate to the penny what it’s going to cost to rebuild a home.

We take that worry away from you.” With the everchanging price of building materials and labor, it’s easy to see why GRC is the gold standard for homeowners insurance.Keep in mind that Guaranteed Replacement Cost isn’t available in all states.In North Carolina, ask about Enhanced Replacement Cost.

Talk to a local insurance professional, like one of our agents, for specific questions or a personalized estimate for your home.Replacement Cost vs.Market Value: What’s the Difference? When you purchase a home and start considering protecting your investment, this is often the first question.

The answer is often “more than you just paid for it,” says ERIE’s VP of product management.“People naturally gravitate to how much they paid for the house, but we’re not insuring it to buy it from you – we’re insuring it to rebuild it in case something happens,” they said.“The question you need to ask is, how much would it cost if a builder needs to rebuild it?” This is why replacement cost is often more than the market value of your home or even what you might be able to sell it for.

Figuring out rebuilding costs can be elusive, as a range of factors contribute to the actual cost.Guaranteed Replacement Cost takes the guesswork out, assuring that you’re covered – even if you need to rebuild your entire home.1 What are Loss Settlement Options in Homeowners Insurance? Guaranteed Replacement Cost is one of a range of choices—called “loss settlement options” in the business—that insurance companies offer to homeowners.Common loss settlement options include: Each one works a little bit differently.

Different insurance companies offer different things, too.(For example, some companies may not offer actual cash value loss settlement for the dwelling on your primary home – meaning it would only be available for secondary homes and contents.You’ll learn more about actual cash value below.) Here’s a breakdown of some of those key differences: Replacement Cost vs.

Guaranteed Replacement Cost That one word – guaranteed – makes a big difference if you’re facing a total loss of your home.Here’s what makes replacement cost different from Guaranteed Replacement Cost.Here’s the big difference: If your home is destroyed and a builder actually estimates that the cost to rebuild is more than that replacement cost figure, then you, as the homeowner, are responsible for making up the difference.

That’s why it’s important as a homeowner to ensure you know and are comfortable with how much your home is insured for.The premium amount you pay for replacement cost compared to Guaranteed Replacement Cost is typically about the same, although some factors unique to your situation may make one or the other more expensive.Extended Replacement Cost vs.

Guaranteed Replacement Cost Think of extended replacement costs as a predetermined amount of cash you can dip into if the rebuild cost runs high.Still, it’s not the same as Guaranteed Replacement Cost.Here’s how it works: While 25% may seem like a lot, circumstances often cause costs to soar well beyond that.

“When a hurricane or tornado does a lot of damage in a specific area, the cost to rebuild skyrockets,” ERIE’s VP says.“Everyone is trying to rebuild, and the cost of lumber, labor, and building supplies all go up.You won’t have nearly enough to rebuild if you don’t have the right coverage.” Premium costs for extended replacement cost are generally comparable to Guaranteed Replacement Cost, although some factors unique to your situation may make one or the other more expensive.

Actual Cash Value vs.Guaranteed Replacement Cost In simple terms, the actual cash value is basic coverage.While there’s no doubt that actual cash value is typically your least expensive option, there is also truth in the old saying: you get what you pay for.

Ask One of Our Local Agents About Guaranteed Replacement Cost Of course, the ideal scenario is that you will never need to use Guaranteed Replacement Cost coverage.Yet, if you do need it, you can rest assured that GRC will provide the money necessary to rebuild without requiring you to shell out additional cash.Upgrading your homeowners’ insurance to include Guaranteed Replacement Cost is simple.1 Just contact one of our local insurance agents to make it happen.

ERIE insurance products and services are provided by one or more of the following insurers: Erie Insurance Exchange, Erie Insurance Company, Erie Insurance Property & Casualty Company, Flagship City Insurance Company and Erie Family Life Insurance Company (home offices: Erie, Pennsylvania) or Erie Insurance Company of New York (home office: Rochester, New York).  The companies within the Erie Insurance Group are not licensed to operate in all states.Refer to the company licensure and states of operation information.The insurance products and rates, if applicable, described in this blog are in effect as of January 2024 and may be changed at any time.  Insurance products are subject to terms, conditions and exclusions not described in this blog.

The policy contains the specific details of the coverages, terms, conditions and exclusions.  The insurance products and services described in this blog are not offered in all states.  ERIE life insurance and annuity products are not available in New York.  ERIE Medicare supplement products are not available in the District of Columbia or New York.  ERIE long term care products are not available in the District of Columbia and New York.  Eligibility will be determined at the time of application based upon applicable underwriting guidelines and rules in effect at that time.Your ERIE agent can offer you practical guidance and answer questions you may have before you buy.A better insurance experience starts with ERIE.

Haven’t heard of us? Erie Insurance started with humble beginnings in 1925 with a mission to emphasize customer service above all else.Though we’ve grown to reach the Fortune 500 list, we still haven’t lost the human touch.Contact Drake Insurance today to experience the ERIE difference for yourself.