Insurance Glossary

Replacement Cost Coverage

Property

Definition

Insurance that pays to replace damaged property with new items of similar kind and quality without deducting for depreciation, resulting in higher payouts than actual cash value coverage.

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Related Terms

Actual Cash Value

The repayment value for indemnification due to loss or damage of property; in most cases it is replacement cost minus depreciation.

Depreciation

The decrease in value of property over time due to wear, tear, age, or obsolescence.

Claim

A formal request by a policyholder to an insurance company for coverage or compensation for a covered loss or policy event.

Collision Coverage

Insurance coverage that pays for damage to your vehicle resulting from a collision with another vehicle or object.

Comprehensive Coverage

Insurance coverage for damage to your vehicle from causes other than collision, such as theft, vandalism, fire, weather events, or hitting an animal.

Coverage

The scope of protection provided under an insurance policy, including the types of losses and risks that are covered.

Liability Coverage

Insurance that covers legal responsibility for injuries or damage caused to others or their property.

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