GlossaryEN1 min readUpdated: Jun 26, 2026

replacement value

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Last updated: 26 June 2026Published: 27 January 2026

Source: https://de.wikipedia.org/wiki/Neuwert

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Logistics Concept

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Definition & Explanation

In cargo insurance, replacement value enters the picture the moment goods are lost or damaged and need to be reinstated: it reflects the current market cost of procuring an identical or equivalent new item today, covering purchase price, freight, duties, and all sourcing expenses. No deduction is made for age, wear, or depreciation – that is the critical distinction from actual cash value. A replacement-value policy therefore settles a total loss at the full cost of a new equivalent, whereas an actual-cash-value policy applies depreciation first. For new consumer goods and branded merchandise, replacement value is the standard basis; for second-hand machinery or fully amortised assets, insurers often push back and apply depreciation adjustments. Customs authorities may also reference replacement value when assessing temporarily exported goods upon re-import.

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