What does Replacement Cost mean? Read on to discover the definition & meaning of the term Replacement Cost - to help you better understand the language used in insurance policies.
Replacement cost refers to the amount of money required to replace a piece of property when depreciation of the item's value is not taken into account. In the context of property insurance, replacement cost can dictate the amount an insurer will have to pay out to a policyholder to satisfy a claim.
More Insurance Terms And Definitions
The Merriam-Webster Dictionary defines insurance as:
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. 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: