Replacement cost for homeowner’s insurance?

I know an individual who had a building on their property damaged by a fire. This person has homeowner’s insurance with replacement cost coverage. After taking what pictures they could of the damaged goods in the building and uncovering receipts for goods that were in the building, the replacement cost ended up to be quite a sizeable amount (>$ 100k). The insurance company has delayed payment for about 3 months now and has now decided they’ll only give him a check for half the value. Once he proves he has replaced those goods, they’ll give him a check for the other half. Is this typical practice by insurance companies? I understand that they are doing it for the replacement of the actual building, but for all the items that were inside?? It doesn’t make sense. Any insight would be helpful.

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