Homeowner Insurance terminology can be overwhelming, and choosing the right policy is crucial if you ever need it. Generally, you will hear these coverage options: Replacement Cost Value, Replacement Cost Coverage, and Actual Cash Value. Replacement Cost Value is the actual present-day cost in dollars needed to repair or replace the property with like-kind and quality. Replacement Cost Coverage is a provision in an insurance policy that states losses will be adjusted without a deduction for depreciation. Just because someone has replacement cost coverage does not mean it is sufficient to repair or replace fully, because the coverage has a policy limit. Actual Cash Value (ACV) is a provision in an insurance policy that states losses will be adjusted with a deduction for depreciation. ACV may be less than the original value of the property. Have questions about buying a home? Let’s talk!