What Is Replacement Cost Valuation And How Is It Calculated?

One of the most important parts of insurance coverage is making sure that you are properly covered in the event of a loss. An insurance policy will usually only cover a certain amount, so making sure that your policy covers the replacement cost is essential to proper coverage.

This post is meant to be a primer on the different factors to consider when purchasing insurance coverage for your buildings. A proper understanding of these terms is a crucial aspect to protecting your assets in the face of damage or loss. The total amount it will cost to replace and cover your losses is called the "Replacement Cost Valuation" or "RCV". Calculating your RCV is a process that requires careful consideration of many factors.