Replacement coverage is provided under the flood policy for dwellings only if the home is the primary residence of the insured and is insured for at least 80% of its replacement cost (or the maximum available under the program). All other losses are adjusted on an actual cash value basis, including losses to contents, and losses to other items such as carpeting, antennas, awnings, appliances and miscellaneous outdoor equipment.
Unfortunately, many people discover they are not eligible for replacement coverage on their building due to under-insurance. Quite often, they only purchase this coverage at the time they are closing on a home because the lender requires it. Generally, they purchase only enough coverage to satisfy the mortgagee, rarely update this amount and often don't purchase coverage for their contents.