If you have replacement cost coverage and suffer a loss, you will receive enough money to replace damaged belongings with comparable items at current prices, up to the policy limit. If you have actual cash value insurance, you will get only enough money to repair or replace the items minus how much the items have depreciated in value since you purchased them. Replacement cost coverage is obviously superior if the premiums are affordable and reasonable. We would like your feedback on this Personal Finance Frequently Asked Question.

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