Replacement Cost Coverage

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What does Replacement Cost Coverage mean? Read on to discover the definition & meaning of the term Replacement Cost Coverage - to help you better understand the language used in insurance policies.

Replacement Cost Coverage

Replacement Cost Coverage

A property insurance term that refers to one of the two primary valuation methods for establishing the value of insured property for purposes of determining the amount the insurer will pay in the event of loss. (The other primary valuation method is actual cash value (ACV).) It is usually defined in the policy as the cost to replace the damaged property with materials of like kind and quality, without any deduction for depreciation.

More Insurance Terms And Definitions

The Merriam-Webster Dictionary defines insurance as:

a: The business of insuring persons or property.

b: Coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril.

c: The sum for which something is insured.

We hope the you have a better understanding of the meaning of Replacement Cost Coverage. If you are looking for the meanings of other important insurance terms and their definitions, just click on the letter below to find the words & concepts you are looking for:

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