Replacement Cost
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The cost to replace property with new items of like quality.
Definition
Replacement cost coverage pays to replace damaged items with new ones of similar kind and quality, without deducting for depreciation. This is more valuable than actual cash value coverage, which subtracts depreciation. Replacement cost gives you enough to buy a new equivalent item.
Example
Under replacement cost coverage, the 5-year-old TV was replaced with a new comparable model worth $800.
More Home Insurance Terms
Insurance that covers the structure of your home.
Coverage for your belongings inside your home.
Coverage for structures not attached to your home.
Pays living expenses if you can't stay in your home.
Covers injuries to others that occur on your property.
Covers minor injuries to guests regardless of fault.
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