Replacement Cost Coverage - Florida

The replacement cost language contained in this Florida statute trumps  your policy language. Remember, statutes can only add more coverage to your policy, they can never take coverage away.


3) In the event of a loss for which a dwelling or personal property is insured on the basis of replacement;

  (a)  For a dwelling, the insurer must initially pay at least the actual cash value of the insured loss, less any applicable deductible. The insurer shall pay any remaining amounts necessary to perform such repairs as work is performed and expenses are incurred. If a total loss of a dwelling occurs, the insurer shall pay the replacement cost coverage with reservation or holdback of any depreciation in value, pursuant to s.627.702.


  • This statute does not apply to Other Structures.  While you may have coverage for replacement of other structures that are buildings, this particular statute will not change coverage or payout of coverage for other structures.
  • This statute only applies to Homeowers’ policies as the term in commonly understood within the insurance industry.
  •  This statute requires the insurer to pay initially no less than the actual cash value of the insured loss less an applicable deductible.
  • As the work is performed and expenses are incurred, the insurer shall pay remaining amounts necessary to perform the repairs. I predict this wordage will generate numerous law suits in the State of Florida. The language used here suggest that the insurer owes the remaining withheld depreciation as the repairs are made and the cost is incurred. Some insurers  claim they do not owe any of the additional withheld depreciation, until all the repairs are finished. This statute controdicts the insurance company's position.
  • The insurer is only required to pay the reasonable and necessary cost to repair or replace the damaged, destroyed, or stolen covered property
  • The insurer does not have to pay any amount which would exceed a Coverage policy limit.

Please call with any questions you may have. This statute is frequently being challenged in court. My opinion in this matter is based upon facts and opinions provided by legal counsel. Should you feel your case has merit, please do not hesitate to call concerning this subject.

Gary Laird Ahrens • PA License # A002288 • Firm License # G008507 • AA Florida Public Adjusting Agency, LLC • 34540 Appaloosa Trl., Zephyrhills, FL 33541 • 866-993-3760

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