Homeowners Insurance: Replacement Cost vs. Actual Cash Value

You might be surprised to learn that even if your homeowners insurance policy covers the cost to replace or repair the damage, the amount you can get depends on some technicalities. What you get depends on whether your home insurance uses replacement cost or actual cash value for that specific thing. Replacement cost insurance works by paying you enough to replace the thing damaged, whether it's a roof or a washing machine. Homeowners insurance actual cash value will only pay you the value of the item — that means the cost to replace the item minus the depreciation.

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UPDATED: Apr 11, 2022

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