Unless the block is substantially made of flammable products or a similar identifiable risk being forced to insure for full value or so called replacement value is similar to being forced to bet on picking first, second and third on a race day i.e. you would only collect on full value if the entire block is destroyed. Perhaps a fire in one unit plus water damage plus the roof being blown off may add up but to nowhere near full value. “Replacement cost” involves a gamble that if the whole block built in say 1963 is destroyed then the owners win a motza i.e. a brand new block; imagine insuring your 1960 car such that you get a current model if (and only if) it is destroyed or stolen; insurance companies wouldn’t allow it without a huge premium as in this case they would be taking the gamble with a fragile and easily stolen item.
This is the context in which the further absurdity of having to pay a substantial amount every few years for a valuation is no longer compulsory. It only makes sense if the insurance co. seems to increasing their valuation well beyond what appears likely value and it is a newish block.