Arizona Department of Insurance
100 North 15th Avenue, Suite 261

Phoenix, AZ  85007-2630

Starting July 1, 2020, we became the
Department of Insurance and Financial Institutions (DIFI).

What is "replacement cost"?

Replacement Cost is the amount necessary to replace or rebuild your home or repair damages with materials of similar kind and quality without deducting for depreciation.

What is "depreciation"?

Depreciation is the decrease in the home's value since the time it was built because of age or wear and tear.

What is "actual cash value"?

Actual Cash Value usually means the sum of money required at the time of the loss to repair or replace the property destroyed, less an amount for depreciation. Actual Cash Value equals the replacement cost less depreciation. Most standard home insurance policies cover the contents of your home (i.e., personal belongings) on an actual cash value basis, but it is possible to purchase replacement cost.

What is a "peril"?

A peril is a condition which can cause a loss. Three examples are fire, windstorm, and theft.