Under the replacement cost insurance, the insurer has the right to either pay the insured for the loss or pay to have the property restored.

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Replacement cost insurance typically covers the cost of replacing damaged property with new property of a similar kind and quality. As such, the insurer has the option to either pay the insured for the loss or pay to have the property restored. This is different from actual cash value insurance, which factors in depreciation and may result in a lower payout.

Under the Replacement Cost Insurance, the Insurer Has the Right