The insurance company has the right to settle claims on a basis of replacement or repair rather then to pay out a cash settlement.

Ask your adjuster to explain your options. An adjuster will usually work with you to achieve a mutual satisfactory solution. If you are experiencing problems then do ask your agent or broker for advice. A broker often will help the adjuster and the insured when it is a problem of communication.

Replacement can also refer to the substitution of property and casualty, health, or life insurance coverage from one policy contract to another. An example is that you purchased a life insurance policy when you were quite a bit younger without paying close attention to the details. You have since found out that you would have been much better off with a different policy. You can replace one policy with another. There are rules about how this is done so that you do fully understand the change.