What Is Replacement Cost In Home Insurance? 
Great question ! Homeowners and renters policies will define the payout for your belongings in most cases as either `` replacement '' or `` actual cash '' value . There can be a big difference between the two , and as the insured , you 'd like `` replacement '' , and as the company , the `` actual cash '' . Here 's why : Let 's say you have a laptop that you bought a couple of years ago , and it 's seen better days , it does n't run quite as quickly as it did , and has a few dings and dents . When it comes time to replace it , replacing your computer with a new version of it is what you would get with `` replacement value '' . With `` actual cash value '' the company would take a look at the price for the new computer , and subtract off the depreciation cost for the length of time you had the old one . You might have to settle for a lesser laptop , or pay the difference in this case to receive the same laptop that the `` replacement '' version would have provided . This is a simplified explanation , but should give you a good understanding of the differences . If you would like more info , just hit the contact me button , I 'd be happy to help . Thanks for asking ! 