But there are some policies that provide coverage for actual cash value of the home (not including the lot). This might be the case for an older, run-down home, where the cost to rebuild would far exceed the value of the home, putting replacement cost coverage out of reach. In California, actual cash value for a dwelling is the same as fair market value, unless it's defined otherwise in the policy, Reitz says.But in states other than California, even replacement cost policies can include limitations on the settlement if you decide to buy another home instead of rebuild. "Know exactly how your policy treats a total loss. When push comes to shove, the language in the policy is what matters," Raab says. "It's a contract."