Replacement cost (RCV)
What it costs to buy the same thing new today.
What it means for your money
Replacement cost ignores what you originally paid and ignores the item's age. It asks one question: to get an equivalent item now, what would you spend?
A replacement cost policy pays this in two parts — the used value first, the rest after you replace the item. That second part is the one people most often leave unclaimed, because nothing arrives to remind them.
Where the number comes from
Usually current retail for a like item. If the exact model is discontinued, it is priced against the nearest equivalent, which is a judgement you are allowed to disagree with.
See this on a real laptop
- Laptop, bought 2021 for $1,600
- That exact model, discontinued
- —
- Nearest current equivalent
- $1,500
- Replacement cost used for the claim
- $1,500
What you paid in 2021 does not set this number. The current equivalent does, and which equivalent gets picked is worth reading closely.
Replacement cost (RCV) sits next to actual cash value, recoverable depreciation and loss report. They tend to arrive together.
Indemnia builds the itemized list this all gets applied to, with the receipt attached to the line it proves. See how it works.