What is the difference between replacement cost and actual cash value?

Replacement Cost: Covers the cost to replace the property without depreciation. Actual Cash Value: Covers the depreciated value of the property at the time of loss.

Replacement cost coverage pays to replace damaged property with new items of similar kind and quality, while actual cash value considers depreciation and reimburses the current value of the damaged property.

A business opts for replacement cost coverage to ensure they can fully rebuild after a fire, rather than receiving the depreciated value of their assets.

Add business interruption insurance to protect against income loss during closures caused by covered events.