Replacement cost vs. actual cash value
Why the valuation line on a renters quote can matter more than the premium.
Actual cash value (ACV) pays what an item was worth at the time of the loss: replacement price minus depreciation for age and wear. Replacement cost pays what it costs to buy a comparable new item.
Example: a four-year-old sofa that cost $1,600 might be valued at a few hundred dollars under ACV, but closer to the cost of a new comparable sofa under replacement cost, less your deductible.
Replacement cost policies commonly pay in two steps: an initial ACV payment, then the remainder when you actually replace the item and send the receipt.
For most renters, upgrading to replacement cost adds a modest amount to the premium and is one of the best-value choices on a quote.
Coverage lines on a renters quote
| Coverage | What it pays for | Typical choice |
|---|---|---|
| Belongings (personal property) | Your furniture, clothes, electronics, and gear after a covered loss | Match your inventory total; prefer replacement cost |
| Liability | Damages and defense if you injure someone or damage their property | $300,000 is a popular choice |
| Additional living expenses | Hotel, meals, and extra costs while your rental is repaired | Shown as a dollar amount or percentage |
| Guest medical | Small medical bills for visitors, no fault needed | Usually $1,000–$5,000 |
| Optional add-ons | Water/sewer backup, scheduled valuables, identity restoration | Compare across quotes |
Commonly covered causes of loss
- Fire, smoke, and lightning
- Wind and hail
- Theft and burglary
- Vandalism
- Burst or overflowing plumbing and appliances
- Frozen pipes
- Ice, snow, and sleet weight
- Explosion
- Vehicle or aircraft impact
- Falling objects
Commonly not covered
- Flooding
- Earthquakes
- Pest infestations
- Mold from long-term leaks
- Damage your pet does to the rental
- The building structure
More guides
- How to compare renters quotes side by side
- Renters home inventory checklist
- Renters insurance for students
- Pets and renters liability
- Moving with renters insurance
- Water damage and sewer backup for renters
- Bundling renters with auto
- Renters insurance discounts to ask about
- First apartment insurance checklist