What describes replacement cost basis for personal line property insurance?

• A. Same as actual cash value replacement.
• B. Replacement or repair of the damaged property as it cost at the time of the loss with property of like kind and quality, with a deduction for depreciation.
• C. Same as B above, without deduction for depreciation.
• D. Is not an endorsement.

Answer: (C)

Replacement cost basis means you reimburse the cost to replace the damaged property with a new item of like kind and quality at current prices, with no deduction for depreciation. This reflects what it would cost to replace today, rather than taking wear-and-tear into account. The option that says no depreciation is the correct match for replacement cost, while one that includes a deduction for depreciation describes actual cash value, and the statement about an endorsement isn’t relevant to the concept.