Insured homeowners sought summary judgment claiming entitlement to guaranteed replacement cost coverage under a homeowners insurance policy after their residence was destroyed by fire.
Instead of rebuilding on the original site, the insureds purchased a different home in another location and asserted that this constituted a “replacement” within the meaning of the policy’s endorsement.
The insurer maintained that the endorsement only modified the monetary limit of coverage and did not displace the policy’s requirement that replacement occur on the same site to qualify for replacement cost benefits.
The court held that the endorsement must be interpreted in conjunction with the underlying policy and that replacement cost coverage remained contingent on reconstruction at the same location.
Because the insureds relocated rather than rebuilding, their loss was limited to actual cash value coverage.
