I get a lot of home owners insurance questions asked here on the About Personal Insurance site. One of the most popular is:

Q. What is the difference between the replacement cost and the actual cash value (ACV) of my property?

A. Replacement-cost coverage pays to replace your home and belongings with materials of "like kind and quality" at current prices. Actual cash-value policies reimburse the depreciated value. A replacement-cost policy will usually cost a little more. Some companies no longer offer replacement cost coverage.

What this means is that if you get an AVC policy then if you have a loss, you will only get what the item was worth at the time of the loss. Let's use a sofa (or couch depending on what part of the country you are from) for an example. If you have an ACV home owners insurance policy then if you bought your sofa a few years ago and you had a fire and the sofa was burned up, then you would get what the sofa was worth today..which is probably about $20 bucks. But, if you have replacement cost on your home owners insurance, then you would get what a new sofa is worth today. Sounds like a good deal right? And it is! So, I would suggest you opt for the replacement cost on your home owners insurance policy.