What is Foolsaurus?

It's a glossary of investing terms edited and maintained by our analysts, writers and YOU, our Foolish community.

Replacement value

Replacement value is an option available for most insurance, especially homeowners insurance and auto insurance.

Expanded Definition

Most insurance will repair your home or auto to its original condition, but if the insured property is totaled or stolen, the standard policy is limited to its blue book value or in the case of personal property its depreciated value. Your policy normally has a specified limit on replacement of the building on your property. Riders are available that will automatically adjust coverage for inflation or will provide replacement value coverage.

Otherwise, the insured must be careful to keep policy coverage up to date to allow for inflation.

Related Fool Articles

Related Terms

Recent Mentions on Fool.com