What happens to single dwellings insured at least 80% of replacement value?

When single dwellings are insured for at least 80% of their replacement value, they are automatically provided with replacement cost coverage. This means that in the event of a loss, the insurance policy will cover the cost to replace the damaged or destroyed property without deducting for depreciation, as long as the dwelling is insured to that specified percentage of its replacement value at the time of the loss.

This coverage is designed to ensure that homeowners can rebuild their property to its current standard and features without being penalized by depreciation calculations, which would lower the compensation based on the property's current market value rather than the cost of a new equivalent structure. Therefore, having at least 80% of the replacement cost value is crucial for homeowners wishing to secure comprehensive protection against losses.

The other options do not align with the concept of replacement cost coverage. Maximum compensation under flood insurance, deductible amounts, and exclusions from policies are not directly contingent on the replacement value coverage specifics.