A: Replacement cost insurance is a comprehensive type of coverage within your policy that pays you to repair or replace your home and your belongings if some covered peril damages them (things like lightning, fire, theft, falling objects, etc.). As long as replacement costs stay within your policy limits, you don’t have to pay anything out of pocket. Whereas, actual cash value insurance pays you the depreciated value of your personal belongings, which is less than what you bought them for and likely not enough to replace them entirely. To keep reading about the difference, please visit our Learning Center.