Replacement value is the amount an individual would have to pay, at the present time, to replace a particular item, taking into consideration the item's age and condition. Replacement value often comes up in the context of insurance, when an insurer has to ascertain the value of a destroyed or stolen piece of insured property. For example, New York Penal Law § 155.20 allows courts to use replacement value of stolen goods if a market value cannot be determined, stating that value shall be evaluated as “the market value of the property at the time and place of the crime, or if such cannot be satisfactorily ascertained, the cost of replacement of the property within a reasonable time after the crime.”
[Last updated in December of 2020 by the Wex Definitions Team]