Replacement cost is a method for valuing the reimbursement of property on an insurance policy.
The most important concept to understand in regards to replacement cost is “new for old, like kind and quality.” The insurance company is going to give you the amount of money (up to your policy limit) that it takes for the materials and labor to replace your home. In most cases, this is the preferred property valuation method.
Watch this video “What is replacement cost?” for more details:
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This is video #6 of a 100 insurance video series that The Murray Group is producing to provide insurance consumers with quick, valuable answers to their everyday insurance questions.
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created by Ryan Hanley