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General

Replacement Cost (RCV)

Replacement cost coverage pays what it costs to replace a damaged item with a new equivalent today, with no deduction for age or wear. It pays more than actual cash value and is the better setting on most homeowners policies.

Pays what it costs to replace a damaged item with a new equivalent today, with no deduction for age or wear. Usually the better setting on a homeowners policy. Example: a fire destroys an eight-year-old sofa you bought for $1,200. Replacement cost pays roughly $1,500 to buy a new equivalent today. ACV would pay around $400 after depreciation.