Replacement Cost Coverage

10 months ago

Insurance Glossary Team

1 minute

Plain English Definition: Replacement Cost Coverage reimburses the full cost of replacing damaged or lost property without factoring in depreciation.

What Replacement Cost Coverage really means for someone with an insurance policy

This coverage ensures policyholders can rebuild or replace damaged property at current market prices, providing better financial protection than actual cash value policies.

Replacement Cost Coverage Real World Examples

A homeowner receives full reimbursement for a new roof after storm damage.
A business is compensated for replacing damaged office equipment at current prices.
A car owner is reimbursed the full cost of replacing a totaled vehicle without depreciation deductions.