What is extended replacement cost (ERC) mean on my homeowners’ policy?

An extended replacement cost (ERC) can give you a little extra insurance coverage. When insurance companies determine the replacement cost of your home, which is used to determine Coverage A, they are using the best available information they have at the time. Purchasing extended replacement cost would allow your Coverage A to increase, which helps offset the higher costs you would otherwise have to pay out of pocket.

UPDATED: Dec 24, 2020

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UPDATED: Dec 24, 2020Fact Checked

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Dec 24, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

UPDATED: Dec 24, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Dec 24, 2020Fact Checked

When an insurance determines the replacement cost of your home, which is used to determine Coverage A, they are using the best available information they have at the time. However, when your home is damaged, it could be that materials and labor are more expensive than was originally anticipated. An example is after a catastrophic event – hurricane, tornado, etc. Since hundreds of households all need repair at the same time, materials and labor are more expensive, and harder to come by. In this case the replacement cost is much higher. Purchasing extended replacement cost would allow your Coverage A to increase, which helps offset the higher costs, otherwise, any costs above your Coverage A are your responsibility.

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Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

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Enter your ZIP code below to compare cheap insurance rates.

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