Name:   GoneFishin - Subject:   Insurance 80%/20% Rule Date:   10/21/2016 10:31:35 PM

Why it important to keep up with the replacement value of you home as stated in your homeowners policy.

"The definition of home replacement cost coverage states simply that “Replacement cost is the amount of money it would take to repair, replace or rebuild your home with materials similar to the kind and quality used in constructing your home”.

An important piece to replacement cost is something called the 80/20 rule. What this means is that your home must be insured to at least 80% of the determined replacement cost for your home in order for you to be fully covered. If you fail to insure your home for at least 80% of the replacement cost, your insurer will not cover the entire cost to rebuild the home and will even assess a penalty on partial loss claims."