To further answer “how are homeowners insurance claims paid,” compare policy options. Some plans will reimburse at your items’ actual cash value versus their replacement cost. When it comes time to receive your claim payout, this will make a big difference. If your property is insured for its cash value, the claim is paid based on the property’s depreciated value. If your coverage focuses on replacement costs, your insurance will offer the amount that the item costs today versus its current value. If you do have replacement cost coverage, your insurance company will likely require you to purchase the replacement item. Then, you will need to provide a copy of the receipt(s). So, your payout will probably come in two sums: one for the actual cash value of the item, then a second payment when you prove you replaced the item.