Replacement cost
Valuation that pays to replace property with new property of like kind, without deducting depreciation.
What it means
Actual cash value subtracts depreciation. Replacement cost does not, subject to the form’s conditions (often rebuild, and often coinsurance). Stock and inventory may use selling price instead.
Why it shows up
The declarations will say RC or ACV next to buildings and business personal property.
What to look for
- Valuation on each covered item
- Coinsurance
- Selling-price clauses for stock
Coverbird reads the declarations and form schedule on the PDF you already have. It does not sell insurance or say whether a limit is enough.
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Related terms
- Coinsurance
A property penalty if you insure a building or contents for less than the required percentage of value.
- Declarations page
The front pages that list who is insured, what is covered, the term, premium, and limits.