Replacement Cost Loss Settlement 80/80 RULE

 Replacement Cost Loss Settlement applies to a single family dwelling provided:

  • It is your principal residence, which means that, at the time of loss, you or your spouse lived there for 80% of:

                               The 365 days immediately preceding the loss; or,
                               The period of your ownership, if you owned the dwelling for less than 365 days; and

  • At the time of loss, the amount of insurance in this policy that applies to the dwelling is 80% or more of its full replacement cost immediately before the loss, or is the maximum amount of insurance available under the NFIP.

The following loss settlement conditions apply to a single family dwelling described above:

a.    We will pay to repair or replace the damaged dwelling after application of the deductible and without deduction for depreciation, but not more than the least of the following amounts:

(1)                 The building limit of liability shown on your Declarations Page;

(2)                 The replacement cost of that part of the dwelling damaged, with materials of like kind and quality and for like use; or

(3)                 The necessary amount actually spent to repair or replace the damaged part of the dwelling for like use.

b.    If the dwelling is rebuilt at a new location, the cost described above is limited to the cost that would have been incurred if the dwelling had been rebuilt at its former location.


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