Most home policies come with replacement cost coverage. Meaning the insurance company will pay the full amount to replace the damage property minus any deductible. This is the coverage I recommend as it makes allows you to replace the property that was damaged or stolen.
However, there are a few areas of a home policy that do not get replacement cost coverage regardless if the rest of the home policy is replacement cost. These items are paid out in actual cash value. Which means the insurance company will deprecate the item based on its age and condition and only pay a portion of what it would cost to replace with a new item.
- Any loss over 2500 for building and 1500 for personal property is paid out as actual cash value, and if repairs are made within 12 months, then the policy will pay the difference to total replacement cost.
- Loss settlement on cloth awnings, above ground pools, fences, satellite dishes, antennas, piers, and boat docks are all paid out as actual cash value losses.