Always get replacement cost coverage if you can afford it. Replacement cost pays today’s value for replacing your home and belongings. Cash value is the alternative and won’t replace anything in today’s dollars. Say your fish tank leaks and destroys a 20-year-old credenza and 10-year-old carpeting. With cash value, your homeowners policy only pays for the cost of an old credenza and decade-old carpeting. You will not be covered for the cost of new replacements.