Use dotted terms for definitions. You can also browse the glossary.
Before you decide
- Purchase price and rebuilding cost are different.
- Read cause of loss and settlement basis separately.
- Check code costs and insurance-to-value conditions.
Establish what is building property
List the main structure, attached fixtures and separate structures. Ask where appliances, improvements, equipment and movable owner property fit. Obtain a supported property-specific reconstruction estimate rather than using an assumed fraction of purchase price.
TDI explains the difference between replacement cost and depreciated value. A rental or commercial form may add different conditions and exceptions, so record the actual valuation and roof provisions.
Building review sheet
- Insured amount and source/date of estimate?
- Covered-cause form and material exclusions?
- Roof settlement, age schedule or cosmetic restrictions?
- Coinsurance or other insurance-to-value requirement, if any?
- Ordinance/law, debris and other separate limits?
- Deductible basis and repair/replacement payment conditions?
Use a partial-loss test
Ask how the proposed form handles a repair smaller than the building limit when the insured value is below a contractual requirement. Travelers’ coinsurance explanation illustrates why underinsurance can affect a partial loss when such a clause applies.
Then ask about mandatory code work and temporarily withheld depreciation. A large headline limit does not answer those funding questions.
Sources & scope
- Texas Department of Insurance: Replacement cost or actual cash value?
Residential valuation explanation, January 24, 2024. A rental or commercial form may use different settlement conditions.
- Travelers: Calculating coinsurance
Carrier explanation of a property coinsurance clause when one applies. Not every form contains this condition.
- Progressive: Ordinance or law coverage
July 3, 2025. Residential product explanation; commercial coverage parts and local code enforcement need separate review.
Sources checked October 24, 2026. General descriptions do not replace the policy, endorsements, declarations or an insurer’s coverage determination. Examples are hypothetical unless explicitly identified otherwise.
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