Replacement Cost includes:

1. Demolition and removal of the damaged or destroyed structure. When a loss occurs, the damaged part must be removed. If a total loss occurs, an average home can easily cost $10,000 for these services.
   
2. Increased cost of construction. New construction must be built to current building codes rather than the codes the house was originally built to.
   
3. Architect Fees & Other Trades Fees. Damage to or destruction of property will require that an architect prepare a new plan for reconstruction. In addition, it’s often necessary to bring in an engineer to substantiate whether damage can successfully be repaired or must be replaced.

Replacement Cost excludes:

1. Land.The insurance company is not responsible for paying for damage that may have resulted from the covered loss to your property. While land is not covered, often there will be nominal coverage for trees, plants, and landscaping that need to be fixed as a result of a loss.

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