Actual Cash Value coverage reimburses you for the cost of the lost or damaged item minus depreciation. So, if a fire destroys your 10-year-old TV, you are reimbursed for the value of a 10-year-old TV. Replacement Cost Value coverage reimburses you for the cost to buy a new TV.
Replacement Cost Value coverage is pricier than Actual Cash Value coverage, but you will be glad to have it if you ever lose everything in a disaster.
