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two common types of coverage or replacement cost and actual cash value so what is the difference replacement cost refers to the cost to replace your property with new property of the same kind and quality with replacement cost there is no consideration given to depreciation for example under replacement cost coverage if your windows are damaged in the storm your policy would buy brand-new windows and pay the cost of having them installed in place of the damaged windows actual cash value refers to the current or market value of your property essentially this is the cost of the property new less depreciation based on the age condition and expected remaining life of the property in question taking our example of Windows damaged in a storm once again under an actual cash value coverage the insurance company would determine the age condition and expected remaining useful life of the windows and would pay ing to their current or market value in this case the insurance company simply provides