In order to qualify for Replacement Cost, the policyholder must be insured for at least?

To qualify for Replacement Cost coverage under an insurance policy, it is generally required that the policyholder insure the property for a minimum amount, often set at 80% of the replacement cost. This requirement helps ensure that the insurance coverage is adequate to fully cover the cost of replacing the damaged or destroyed property. By maintaining a policy value that meets or exceeds this threshold, the policyholder protects themselves from significant financial losses in the event of a total loss.

When a policyholder insures their property for less than the requisite percentage of replacement cost, they risk being underinsured. If a loss occurs, claims may be subject to depreciation based on the actual cash value rather than replacement cost, which could leave the insured with a financial gap. This is why maintaining insurance coverage that meets the 80% threshold is vital for securing Replacement Cost benefits.