Cal. Code Regs. tit. 10, section 2695.183 - Standards for Estimates of Replacement Value

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• California Code of Regulations Title 10 section 2695.183, titled Standards for Estimates of Replacement Value, exists; the filing note reads New section filed 12-29-2010; operative 6-27-2011 pursuant to Government Code section 11343.4(b) (Register 2010, No. 53).

  claim ca-10-ccr-2695-183#c1

• An estimate of replacement cost must include the cost of labor, building materials and supplies; overhead and profit; the cost of demolition and debris removal; and the cost of permits and architect's plans.

  claim ca-10-ccr-2695-183#c2

• The estimate must consider components and features of the insured structure including type of foundation, type of frame, roofing materials and type of roof, siding materials and type of siding, whether the structure is located on a slope, the square footage of the living space, geographic location of property, number of stories and any nonstandard wall heights, materials used in and generic types of interior features and finishes, age of the structure or the year it was built, and size and type of attached garage.

  claim ca-10-ccr-2695-183#c3

• The estimate of replacement cost shall be based on an estimate of the cost to rebuild or replace the structure taking into account the cost to reconstruct the single property being evaluated, as compared to the cost to build multiple, or tract, dwellings.

  claim ca-10-ccr-2695-183#c4

• The estimate of replacement cost shall not be based upon the resale value of the land, or upon the amount or outstanding balance of any loan.

  claim ca-10-ccr-2695-183#c5

• The estimate of replacement cost shall not include a deduction for physical depreciation.

  claim ca-10-ccr-2695-183#c6

• The licensee shall, no less frequently than annually, take reasonable steps to verify that the sources and methods used to generate the estimate of replacement cost are kept current.

  claim ca-10-ccr-2695-183#c7

• Subdivision (g)(1) sets more than one clock. The licensee must provide a copy of the estimate of replacement cost to the applicant or insured at the time the estimate is communicated. In the event the estimate is communicated by telephone to an insured, the copy shall be mailed to the insured no later than three business days after the time of the telephone conversation. In the event the estimate is communicated by telephone to an applicant, the copy shall be mailed to the applicant no later than three business days after the applicant agrees to purchase the coverage.

  claim ca-10-ccr-2695-183#c8

• Subdivision (g)(1) also carries an exception: in the event the estimate of replacement cost is communicated by a licensee to an applicant to whom the licensee determines an insurance policy shall not be issued, the licensee is not required to provide a copy of the estimate of replacement cost.

  claim ca-10-ccr-2695-183#c9

• The re-disclosure subdivision does not apply when the update or revision to the estimate of replacement cost or the policy limit results solely from the application of an inflationary provision in a policy or an inflation factor.

  claim ca-10-ccr-2695-183#c10

• Licensees shall maintain a record of the information supplied by the applicant or insured that is used by the licensee to generate the estimate of replacement cost, and if a policy is issued these records and copies shall be maintained for the entire term of the insurance policy or the duration of coverage, whichever terminates later in time, and for five years thereafter.

  claim ca-10-ccr-2695-183#c11

• Under 10 CCR 2695.183(a), an estimate of replacement cost must include the expenses that would reasonably be incurred to rebuild the insured structure in its entirety, including at least the cost of labor, building materials and supplies, overhead and profit, cost of demolition and debris removal, cost of permits and architect's plans, and consideration of the components and features of the insured structure.

  claim ca-10-ccr-2695-183#c12

• The regulation states that the estimate of replacement cost shall not be based upon the resale value of the land, or upon the amount or outstanding balance of any loan.

  claim ca-10-ccr-2695-183#c13

• The regulation states that the estimate of replacement cost shall not include a deduction for physical depreciation.

  claim ca-10-ccr-2695-183#c14

• The regulation requires a licensee who communicates an estimate of replacement cost to an applicant or insured in connection with an application for or renewal of a homeowners insurance policy that provides coverage on a replacement cost basis to provide a copy of the estimate to the applicant or insured at the time the estimate is communicated.

  claim ca-10-ccr-2695-183#c15

• The reproduction states that these standards became operative June 27, 2011.

  claim ca-10-ccr-2695-183#c16

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Reviewer notes

Fetched twice on 2026-08-31. Correction from the prior draft: the retention rule is not simply the policy term plus five years. The text is the entire term of the insurance policy or the duration of coverage, whichever terminates later in time, and for five years thereafter, and that full formulation is now used. Authority caveat: Cornell LII is a faithful reproduction, not the state's own publication. The official California Code of Regulations publisher site and a mirror at carules.elaws.us were both attempted on 2026-08-31 and did not return content (blocked host and timeout respectively), so the primary-law authority level here rests on a reproduction. A reader relying on exact wording should confirm against the official CCR. Published: 2010-12-29 Effective: 2011-06-27