Replacement cost value
Updated for plan year 2026
In plain terms
Replacement cost value (RCV) is a valuation method that pays what it would cost to buy a new equivalent of a damaged or stolen item today, with no deduction for depreciation. It is the opposite of actual cash value, and on renters and home policies it is usually worth the small premium difference.
A plain example
Your five-year-old laptop is stolen. Under replacement cost, the policy pays what a comparable new laptop costs now, not the depreciated value of a five-year-old machine.
Why it matters
The valuation setting can matter more than the coverage limit for what you actually collect. Replacement cost usually costs only a few dollars more a month but turns a policy that reimburses depreciated value into one that truly replaces your things.
A common point of confusion
Replacement cost often pays in two steps: the depreciated amount first, then the rest after you replace the item and send a receipt. It's still worth it; just keep receipts.