Replacement cost insurance means initially theu pay you the replacement cost of the bike , -- minus age related depreciation and minus the deductible. When you actually replace the bike with an equivalent replacement, -- any depreciation with held is payable back to you
For instance
2005 Ritchey Breakaway ---- assume a replacement cost of $3500 with a nice kit ---
11 years of depreciation is deducted - basically getting it down to FMV -- so, say, --- $2000 value
Then the deductible is subtracted -- lets assume $500
Your net claim before depreciation is recovered is $1500 ---
Provided the item is replaced with an equivalent new item, -- you recover your $1500 depreciation on the tail end after providing documentation that you replaced the item
If it is an actual cash value policy for personal property and contents, -- you get paid $1500, and good luck