Does State Farm Have Guaranteed Replacement Cost?

When shopping for homeowners insurance, you’ll likely come across the term “guaranteed replacement cost”. This refers to a policy feature that provides extended coverage to rebuild your home in the event of a total loss. But does State Farm offer guaranteed replacement cost coverage?

The answer is yes, State Farm does offer guaranteed replacement cost as an option with their homeowners insurance policies. Here’s an overview of how State Farm’s guaranteed replacement cost coverage works and what it covers.

What is Guaranteed Replacement Cost?

Guaranteed replacement cost is an optional coverage add-on that you can purchase with a standard homeowners insurance policy.

With a standard policy, your dwelling coverage is subject to the stated limit on your policy declarations page. For example, if you have $250,000 in dwelling coverage and it costs $300,000 to rebuild your home after a total loss, you’d receive the $250,000 limit but would be responsible for the additional $50,000.

Guaranteed replacement cost provides extended dwelling coverage above your stated limit in the event of a total loss. Using the same example, with guaranteed replacement cost the insurer would provide up to $300,000 to fully rebuild your home.

Key features of guaranteed replacement cost:

  • Covers full rebuild cost even if it exceeds dwelling limit
  • Requires insurer to pay reasonable rebuild costs
  • Applies only to the main dwelling, not other structures
  • Available as an add-on coverage for an additional premium

State Farm’s Guaranteed Replacement Cost

State Farm offers guaranteed replacement cost as an optional endorsement you can add to their standard homeowners insurance policies.

With State Farm’s guaranteed replacement cost coverage, you’ll receive extended dwelling coverage to rebuild your home after a covered total loss. Some key points:

  • Must insure home to 100% of estimated replacement cost initially
  • Covers the full cost to repair or rebuild the dwelling
  • Applies up to 200% of the dwelling limit shown on your policy
  • Available at an additional cost above your base premium

So if you had $250,000 in dwelling coverage, State Farm would provide up to $500,000 to rebuild after a total loss. This gives you peace of mind that you’ll have enough to fully reconstruct your home.

What’s Covered vs. Excluded

State Farm’s guaranteed replacement cost covers repairing or rebuilding the main dwelling structure and attached additions. It does not apply to detached structures like sheds, garages, or fences.

You’ll also need to have insured your home initially for 100% of the estimated replacement cost, as determined by State Farm or an independent appraisal. Guaranteed replacement cost won’t apply if you’ve underestimated the rebuild cost.

And as with any insurance policy, State Farm’s guaranteed replacement cost is subject to your policy terms, limitations, exclusions, and conditions. For example, it wouldn’t cover a loss from a non-covered peril like flood or earthquake.

Is Guaranteed Replacement Cost Worth It?

Whether guaranteed replacement cost is worth the extra premium depends on your situation:


  • Protection against rebuilding cost overruns
  • Peace of mind your home can be fully repaired
  • Coverage for 200% of dwelling limit


  • Added premium expense
  • Still subject to policy limits and exclusions
  • Requires accurate home value estimate

For many homeowners, the added protection is valuable despite the higher cost. But consider your budget and risk tolerance when deciding. Your State Farm agent can provide quotes with and without guaranteed replacement cost coverage so you can compare.

The Bottom Line

Guaranteed replacement cost is an optional add-on that State Farm offers to extend dwelling coverage after a total loss. While it comes at an added cost, it provides assurance your home can be fully rebuilt in the worst case. Check with a State Farm agent to learn more and request a quote.

What is Guaranteed or Extended Replacement Cost Dwelling Coverage


How does guaranteed replacement cost work?

Guaranteed Replacement Cost is the full cost at the time of loss to repair or replace your home with like-kind and quality of materials, subject to policy limits and a few other limitations, such as permitted areas.

What is the guaranteed replacement cost clause?

With guaranteed replacement cost, homeowners insurance pays whatever it costs to rebuild your home to its previous size and specifications. This coverage is often recommended for homes in areas prone to wildfires, tornadoes, and hurricanes.

What is 100% replacement cost coverage?

What is replacement cost coverage? A replacement cost policy helps pay to repair or replace damaged property without deducting for depreciation, says the III. This type of coverage may be available for both your personal belongings and your home if they are damaged by a covered peril. Personal property coverage.

Is extended replacement cost worth it?

Our experts recommend that all homeowners have some additional replacement cost coverage, as the fees are small compared to the financial costs you could be on the hook for should supply costs rise.

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