Depending on the policy that you purchased with your agent or broker, the amount payable after a loss will either be based on Replacement Cost or Actual Cash Value. Replacement Cost is the cost of repair or replacement (whichever is less) with a comparable like, kind and quality, without an amount taken away for depreciation. If repairs are being done, only new materials of the same kind and quality will be used. Actual Cash Value is the value of something on the day the claim is made, not the value of it when it was new.  This is calculated by taking the replacement cost then taking away an amount for depreciation, which is figured out by the condition of an item, its resale value, and its normal life expectancy. Example: Let’s say you bought a brand new TV for $1,500.00 in 2012 and it gets stolen one year later.  Calculations show that the TV was worth $1,000.00 when it was stolen.  With Replacement Cost on your policy, you would get a new TV of the same like, kind and quality for the amount that it costs to purchase on the date of your loss.  With Actual Cash Value, you would get $1,000.00 cash (which is the price of the television used).