ADJUSTERSINTERNATIONAL.COM 5 extended replacement cost policy to produce a more competitive premium, believing that the settlement extension will protect the buyer. • Guaranteed replacement cost coverage, which pays whatever it costs to replace damaged property, regardless of the building property limit. (That limit may still be in place for purposes of rating coverage and serving as a benchmark for other limits.) Of these options, only guaranteed replacement cost coverage represents a commitment to fully cover the cost of reconstructing a damaged structure (minus a deductible). Guaranteed replacement coverage was once a common feature of homeowners insurance, but it no longer is. Its relatively high premium cost reflects the high level of risk insurers assume. Debris Removal Neither guaranteed replacement cost settlement nor ample limits, on their own, will ensure that a property owner is fully insured for a loss. Still other factors must be considered. Before repairing or replacing damaged property one must remove the debris and perhaps demolish undamaged portions of a structure (and remove that debris as well). Coverage for debris removal costs is provided differently in commercial property WHAT TO WATCH FOR How much additional coverage does the debris removal provision provide (above 5 percent or 25 percent of the deductible and loss payment)?
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