There is a huge difference between the two valuation types when it comes to homeowners insurance
. Replacement cost
coverage means you would receive the amount of money it would take to replace your personal items (like a camera, for example) brand new. Actual cash value (sometimes written as ACV) means that the amount you receive for your personal items would take depreciation into account. Replacement Cost
: If your 2-year old camera is stolen then you would receive the amount necessary to replace the camera with a brand new version. Actual Cash Value
: If your 2-year old camera is stolen then you would receive an amount based on the age of your camera.