Replacement Cost Value (RCV)
Insurance coverage that pays to repair or replace damaged property with new materials of similar kind and quality without deducting depreciation, though most RCV policies still pay in two stages, releasing the depreciated (ACV) amount first and the remaining "recoverable depreciation" only after the repair is actually completed and documented.
Why it matters
The two-stage payment structure means a policyholder with RCV coverage still has to actually complete the repair and submit proof of it to collect the full amount they're entitled to; the recoverable depreciation isn't released automatically just because the policy is technically RCV.
On a real project
A homeowner with RCV coverage receives an initial ACV payment after a covered loss, then submits paid invoices and photos of the completed repair, triggering a second payment for the recoverable depreciation that brings the total up to full replacement cost.
Who this matters most to
An Insurance Adjuster tracks which portion of an RCV claim remains recoverable pending proof of completed repairs. A Restoration Project Manager makes sure completed-work documentation actually gets submitted to the insurer promptly, since a policyholder's final payment depends on it.
Where this goes wrong
A property owner completes repairs under an RCV policy but never submits the documentation needed to release the recoverable depreciation, assuming the insurer would send it automatically. Months later they realize a significant portion of their payout was never collected, and some insurers set a deadline after which the recoverable depreciation can no longer be claimed at all.