1. 1370 POINTS
    Jack HellerPRO
    Owner, Insurance Browser,
    Different companies and different states have different nomenclature for coverages.

    What this typically means is limit that coverage extends to another higher limit in the event of a total loss exceeding the Coverage A ( homeowner Dwelling limit).

    If you have a replacement value of say 400,000 on the house, then the maximum that would normally be paid for replacing the house would be $400,000 . But setting the value of replacement is not exact science and is also a moving target. If your home is destroyed by a fire it may be possible to rebuild within that 400,000 limit. But suppose the the city you live in is ripped apart by a tornado. Now there could be escalating costs of material and labor. What the extension does is give you an extension to another limit if needed.

    The extensions are usually sold in percentage increments such as 25 %,50% or even 100%.

    So, back to the 400,000 coverage on the house. If 25 % extension then the limit of coverage is increased to a maximum of 500,000 (400,000 X 1.25)

    I hope that helps . If you live in one of the following states I would be glad to assist you : AZ,CA,MO,TX and GA. ( call 1.866-933-4372)otherwise seek out an Independent agent in your area who represents sever companies. 

    Jack Heller, CPCU
    Answered on November 16, 2013
  2. 135 POINTS
    Cody Hughes
    Owner/CEO, Tristate Insurance, Missouri, Oklahoma, Arkansas, Kansas
    Extended coverage is provided IN ADDITION to your Coverage A limit. Let me explain:

    Assume your homeowners policy covers your house for $100,000. A storm comes through and completely wipes out your house. While you are in the process of rebuilding, you find out from the contractor that it's actually going to take $110,000 to completely rebuild. If you have extended coverage on your policy, it will cover the extra cost of $10,000.

    Typical homeowners policies will have built in to the price additionally 25%. But ask your agent specifically what that policy has, as all companies are different.
    Answered on September 25, 2014
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