Replacement cost value
Pays to replace your property with a new equivalent, no depreciation deducted.
Full definition
Replacement cost value (RCV) coverage pays what it costs to replace your damaged or stolen property with a new equivalent today — without deducting for age or wear. It's more expensive than actual cash value (ACV) coverage but pays significantly more at claim time. For homeowners and renters insurance, RCV coverage for personal property can mean 30–50% more payout on older items.
Real-world example
Your 5-year-old laptop is stolen. Replacement cost: $1,400. Actual cash value (depreciated): $600. With RCV coverage, you get $1,400. With ACV coverage, you get $600.
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Pays to replace your property with a new equivalent, no depreciation deducted.
Related terms
- Actual cash value
Pays the depreciated value of property — what it's worth today, not what it costs to replace.