Replacement cost insurance

Insurance that pays out the full amount required to replace damaged property with new property, without taking into account the depreciated value of the property.

Replacement Cost Insurance

An insurance policy in which the insurer will pay the entire cost of replacing the insured asset in the case it is damaged or destroyed. That is, there is not maximum benefit on the policy; the insurer simply pays the replacement cost regardless of what it is. Importantly, a replacement cost plan does not take depreciation into account.

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