What is the cost associated with replacing property at current market prices called?

The cost associated with replacing property at current market prices is referred to as the replacement cost. This term describes the amount it would take to replace an asset or property with a new one of similar kind and quality, without factoring in depreciation. In essence, replacement cost reflects the price that would be paid for a new item that serves the same purpose as the original, considering current market conditions.

Understanding this concept is crucial in the context of insurance claims and property evaluations, as it directly influences how much coverage is adequate and how claims are assessed. Replacement cost does not take into account the wear and tear or age of the property, thus providing a clearer picture of the financial responsibility needed to replace what was lost or damaged.