What Does Replacement Cost Mean In Home Insurance? 
The difference between replacement cost and fair value coverage can be significant . If a home with a roof 15 years old suffers hail damage , fair value coverage would only pay 25 % of the cost of a new roof assuming a 20-year roof life . Replacement cost would pay the full cost of replacing roof . This applies to both the home and all its contents . Carefully consider the difference in premium between replacement cost and fair value coverage . 