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The Difference Between Replacement Cost and Actual Cash Value

Updated: May 3

Ever wondered about the difference between replacement cost and actual cash value when it comes to insuring your home? Don’t worry… we’ve got your covered!




Replacement Cost: This coverage ensures that your home is insured for the amount it would cost to rebuild it at current construction costs. In the event of damage or loss, your insurance provider will cover the expenses to repair or rebuild your home to its original condition, without factoring in depreciation.


Actual Cash Value: On the other hand, actual cash value coverage takes depreciation into account. If your home suffers damage or loss, your insurance provider will reimburse you for the current value of your home, factoring in depreciation. This means you may receive less than the amount needed to fully replace or rebuild your home.


Why does this matter? If you have actual cash value coverage, you might not get enough money from your insurance company to rebuild your home the way it was before. You could end up having to come up with a lot of money out of your own pocket to make up the difference. On the other hand, if you have replacement cost coverage, you can rest assured that your insurance company will pay the full cost of rebuilding your home, up to your policy limits.


If you want to ensure your policy covers unexpected perils, reach out today for a personalized quote. You can stop by our office at 1010 12th Street in the Heights in Hood River or visit our website to learn more. 🌐www.crownpointinsurancegroup.com 📞541-399-8001

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