Finance Quick Answers
What is the difference between replacement cost and cash value homeowners property insurance?
If you have replacement cost coverage, you get enough money to replace damaged belongings with comparable items. If you have actual cash value insurance, you only get enough money to repair or replace the items minus how much the items have depreciated in value since you purchased them. Replacement coverage is obviously superior if the premiums are affordable and reasonable.
Brenda Procter, M.S., Consumer and Family Economics, College of Human Environmental Sciences, University of Missouri-Columbia
If you'd like to learn more about this and other personal finance topics, the University of Missouri offers 'Personal & Family Finance,' a correspondence course, through the Center for Distance and Independent Study (800-609-3727). Information about this course is available at http://cdis.missouri.edu/CourseInfo/DetailCourseInfo.asp?1985.
Last update: Monday, July 21, 2008