What is the difference between 'actual cash value' (ACV) and 'replacement cost' coverage?

ACTUAL CASH VALUE (ACV) vs REPLACEMENT COST: ACV pays the cost to replace the item MINUS DEPRECIATION (the item's used/depreciated value) — e.g., a 10-year-old roof is paid at its depreciated worth, not the cost of a new roof; REPLACEMENT COST pays the FULL cost to replace the item with a NEW one of like kind and quality, WITHOUT deducting depreciation. Property insurance/valuation. Replacement cost coverage costs more (higher premium) but pays more at claim time; ACV is cheaper but leaves a gap (the depreciation). Some policies pay ACV first, then the depreciation amount after repairs are completed. Knowing the difference (ACV deducts depreciation; replacement cost doesn't) is fundamental property insurance valuation knowledge.