I never knew how many different types of insurance there are until I took some courses. For real estate, there are actual cash value (ACV) and replacement cost policies. For homeowners, I recommend a HO-3 (Homeowner 3 replacement cost) as opposed to an HO-1 (Homeowner 1actual cash value) whenever possible. For landlords, I recommend a DP-3 (Dwelling Policy 3) as opposed to a DP-1 (Dwelling Policy 1).
Replacement cost insurance will cost you more because it is a better policy. It will pay the actual cost to replace/or restore the property. Under the “pair or set” clause, it will pay for an entire set of cabinets of you lose only part of them in a fire or flood. The actual cash value policy, or depreciated cost as I refer to it is different.
The adjuster will come in and determine the age of whatever was damaged, and depreciate the value of it based on the expected life their computer tells them it should have. Most people who have claims under these policies will have to come out-of-pocket for a substantial portion of the repairs, depending on the age and condition of the property.