What is RCV (Replacement Cost Value)?
RCV (replacement cost value) property insurance is a type of coverage that compensates policyholders for the full cost of replacing damaged or lost property with a comparable item at current market prices, without deducting for depreciation. Unlike ACV (actual cash value) coverage, which factors in depreciation when determining compensation, RCV insurance aims to restore the insured property to its pre-loss condition without regard to its age or condition at the time of the loss. In the event of damage or loss covered by the policy, the insurer reimburses the policyholder for the actual cost of purchasing a new replacement item or repairing the damaged property, up to the policy’s coverage limit. RCV insurance typically results in higher payouts than ACV coverage, making it a more comprehensive option for ensuring full financial protection against property damage or loss.
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