Texas · Home · Valuation
The policy rebuilds the house. It does not buy the lot.
Replacement cost is what it would take to rebuild the structure with like kind and quality, up to the limit on the policy. Market value is what a buyer would pay for the house and the land together. Land is not insured. Using the sale price, the tax appraisal, or a listing estimate as Coverage A is how a total loss comes up short.
Extended replacement cost, when the form includes it, is a percentage above Coverage A for a covered total loss. It is not a promise that any rebuild, at any bid, is paid. Ordinance or law, if you bought it, pays part of a code upgrade. It has its own limit. Contents can be replacement cost or actual cash value depending on the form. That choice is on the declarations, not implied by the dwelling limit.
The words, kept apart: replacement cost coverage, replacement cost versus actual cash value, and actual cash value. The dwelling limit itself: Texas dwelling coverage. How to set it: how to determine Texas home insurance. The rest of the contract: coverage, Texas homeowners, home and household, and the product.
