Defined term
Replacement cost value (RCV)
Replacement cost value is the cost to replace damaged property with new property of like kind and quality, with no deduction for depreciation.
RCV is the higher-tier insurance payout: the cost to replace damaged property with new, undepreciated property. Most policies pay ACV initially and "hold back" the depreciation amount until repairs are completed and documented. The holdback releases as RCV upon proof of completed repair.
The practical trap: the holdback often expires by policy term if repairs aren't completed within the policy's repair window. Insureds who delay repairs (often because the insurer's ACV payment was inadequate to start repairs) can forfeit the RCV holdback entirely.