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Guaranteed Replacement Cost and Extended Replacement Cost

Protecting your business is a no-brainer, but an unexpected claim isn’t the only threat to your business. The cost to rebuild could be an unpleasant complication, especially with the rising cost of materials. That’s where Guaranteed Replacement Cost (GRC) and Extended Replacement Cost (ERC) coverages come in.

The cost of rebuilding after a covered partial or total loss can – and likely will – vary, just look at what happened to the cost of lumber following the pandemic. That’s where these coverages come into play. When either Guaranteed Replacement Cost or Extended Replacement Cost coverage is added to a new or existing ErieSecure Business® (ESB) policy, it gives you the peace of mind you need to know that you’ll be able to rebuild your building back to how it was.

What’s the Difference Between Guaranteed Replacement Cost and Extended Replacement Cost Coverage?

Guaranteed Replacement Cost (GRC) is coverage for what you could face when rebuilding after a covered loss to a covered building. With GRC, you’ll have coverage for the amount you actually spend that is deemed necessary to repair or replace the damages to your building. 

For example, if you have $500,000 in coverage for the building, but after a total loss it costs $640,000 to rebuild, GRC coverage will pay the additional $140,000 for a total payment of $640,000.1 

Extended Replacement Cost (ERC) is an extra, predetermined cushion to use when the expected cost to rebuild extends beyond what you’re expecting. With ERC, you’ll have coverage for up to 125% of the amount your building is insured for to repair or replace your building after a covered loss. 

For example, if you have $500,000 in coverage for the building, but after a total loss it costs $540,000 to rebuild, your ERC coverage will pay the $540,000 because the cost to rebuild is within the 125% of the amount of insurance you have shown on your policy. But let’s say it cost $640,000 to rebuild, then what happens? ERIE will pay $625,000 to rebuild because you have ERC coverage.1


Your business is a reflection of your hard work and needs the right protection—as well as a team of people you can truly count on to do the right thing when the unexpected happens. 

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    Examples are illustrative only; actual claim payments are based on the coverages, terms, conditions and exclusion of the policy

how erie helps

Access to a local ERIE agent

Your ERIE agent is a business owner just like you and will help you find the right coverage at the right price. 

Claims Service You Can Count On

ERIE has a reputation for reliable customer care and claims service. You can breathe easy knowing help is never far away.

Access to Risk Control Services

As part of your ERIE policy, you’ll have access to risk control tools and services to help you identify and reduce common business risks.

Coverage for your Specific Business

ERIE takes an A-to-Z approach when it comes to protecting businesses with a wide range of custom coverages built from years of experience.

Ready to give your coverage an extra cushion? 

Contact your ERIE agent today.

ERIE® insurance products and services are provided by one or more of the following insurers: Erie Insurance Exchange, Erie Insurance Company, Erie Insurance Property & Casualty Company, Flagship City Insurance Company and Erie Family Life Insurance Company (home offices: Erie, Pennsylvania) or Erie Insurance Company of New York (home office: Rochester, New York). The companies within the Erie Insurance Group are not licensed to operate in all states. Go to for company licensure information. The insurance products and rates, if applicable, described on this page are in effect as of November 2022 and may be changed at any time. Insurance products are subject to terms, conditions and exclusions not described here. The policy contains the specific details of the coverages, terms, conditions, and exclusions. The insurance products and services described here are not offered in all states. ERIE® life insurance and annuity products are not available in New York. Eligibility will be determined at time of application based upon applicable underwriting guidelines and rules in effect at that time. Your ERIE® agent can offer you practical guidance and answer questions you may have before you buy.