There are cases wherein we become too lax with signing papers and acting on a whim. Properly study the terms of the policies so that if you do not agree, then you’ll be save from future stressful situations. When the phrase actual cash value is used, it means that the insurance company is going to pay the actual cash value of a damaged item minus considerations such as its age or current condition. Replacement cost coverage on the other hand provides you with an amount that is suffice to buy a replacement item for the damage. Carefully read the policy terms and ask your agent if compromise is an option or if there are alternatives if the terms are not fit to your liking.