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The Difference Between Replacement Cost and Actual Cost Value

The Difference Between Replacement Cost and Actual Cost Value

The Difference Between Replacement Cost and Actual Cost Value
News from Live Insurance News:

When purchasing home insurance, you will be given the option to choose which type of replacement policy is the best suited for your needs, a replacement cost policy or an actual cost value policy. It is important to understand the difference between the two policies to ensure you are getting the coverage that is going to fit into your budget as well as provide sufficient coverage for you home and personal belongings.

Replacement Cost

Replacement cost means if there is damage to the property, the cost of replacement materials used is comparable to the cost of new materials of the same quality and used for the same purpose. In other words, there will not be a reduction in value due to depreciation of the items being replaced. The actual cost to replace damaged items must be equal to or greater than the limit put in place by the insurance company. For example, if the entire roof is damaged, after you pay the deductible, the insurance p…………… continues on Live Insurance News

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