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Replacement cost or actual cash value — which one will I be paid?
Loss settlement clauses decide whether depreciation comes out of your payment, and a coinsurance condition can reduce it further.
What filed forms generally say
Actual cash value generally means replacement cost minus depreciation for age and wear.
Replacement-cost settlement on the dwelling is often conditional: many forms require the building to be insured to a stated percentage of its replacement cost, commonly 80%, before full replacement cost is paid.
Personal property is frequently settled at actual cash value even when the dwelling is on replacement cost, unless an endorsement says otherwise.
Why your policy can still say something else
The coinsurance percentage, which items get replacement cost, and whether depreciation is recoverable after repair are all specific to your form.
Clauses to look for in your own document
- Loss Settlement
- Definitions — Actual Cash Value
- Replacement Cost Loss Settlement endorsement
Policies differ. Upload yours and Poli will show you the actual clause.
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PoliSays explains document wording. It is not an insurer, broker, or law firm, and nothing here is advice.