Functional replacement cost provision or endorsement

{
  "id": "MLC-T-INS-001611",
  "term": "Functional replacement cost provision or endorsement",
  "field": "Insurance and risk management",
  "definition": "A clause or addition to a property insurance policy that modifies the standard replacement cost settlement to functional replacement cost. This provision allows the insurer to pay for the cost to replace damaged property with materials or construction that are less costly but serve the same function. It is often applied to older homes or unique structures where exact replication is not feasible.",
  "subject": "Personal Lines",
  "url": "https://mlchart.com/terminology/insurance/functional-replacement-cost-provision-or-endorsement/"
}