Replacement cost value
Coverage that pays what a new equivalent item costs today, with no deduction for age or wear — the opposite of actual cash value.
Replacement cost value (RCV) is the way you want your belongings and dwelling insured: it pays what it would cost to buy a new, comparable item at today's prices, with no deduction for depreciation. Its cheaper cousin, [actual cash value (ACV)](/glossary/actual-cash-value), subtracts depreciation first — so a ten-year-old TV that cost $1,200 might only be reimbursed for a few hundred dollars. The catch is that replacement-cost claims are usually paid in two steps: the insurer first pays the depreciated (ACV) amount, then releases the rest once you actually replace the item and send the receipt. That is exactly where a [home inventory](/glossary/home-inventory) earns its keep — model numbers, photos, and purchase records prove what you owned so you collect the full replacement value instead of a lowball estimate.