Why is my insurance claim check less than the cost to repair?

When a large claim is paid by an insurance company, they will typically pay the actual cash value of the claim (Replacement cost minus depreciation) even when an Insured has replacement cost valuation form on their Property.

When the check is received it can be very unsettling when you are expecting payment of say $22,000  to repair the damage to your home or building and the check you receive is only $18,500. 

However, if you do have Replacement Cost Coverage,  after all repairs have been completed and proof is sent to the Insurance Company, they will reimburse  you for the withheld amount (in this example, $3,500).

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