What happens when the kitchen in this same house has a fire loss to cabinets let's say that are 12 years old, standard cabinets, nothing fancy, not custom, etc. What should be the replacement cabinet they receive? A lower grade cabinet then what they had damaged in the fire?

 I understand when the damage is done to items that fall under those described in the FRC definition, but what happens when they don't fall within that definition, what is paid?

 Michigan Subscriber

When the functional replacement cost endorsement does not apply, for example to your roof or kitchen cabinets, then the standard settlement provisions of the policy apply. In the ISO HO 00 03, these provisions are that property will be repaired or replaced at replacement cost without deduction for depreciation. The policy pays the lesser of the limit of liability, the replacement cost of that part of the building with like kind and quality, or the necessary amount actually spent to repair or replace the damage.

 In your situation, if you're dealing with the HO 00 03 or a similar policy, the roof and cabinets would be repaired/replaced on this basis. The functional endorsement only applies to those items that meet the definition of obsolete, antique or custom construction. If the insured still had horsehair plaster walls then that would be replaced with standard drywall.