Home insurance replacement cost is a method of determining how much an insurance company will pay out to cover a lost or damaged item.
According to IRMI, a risk management and insurance research firm, home insurance replacement cost is:
“The cost to replace the damaged property with materials of like kind and quality, without any deduction for depreciation. In other words, if your 2 year old TV gets stolen, the insurance company will give you a brand new TV as your indemnity, not another 2 year old TV.”
Not a bad deal.