Under the Dwelling Policy, which is applicable for personal property replacement?

The option of full replacement cost is the correct answer regarding personal property replacement under the Dwelling Policy. This coverage ensures that when personal property is damaged or destroyed, it can be replaced with new items of similar kind and quality, without deducting any depreciation. This is a beneficial feature for policyholders because it allows them to recover fully from a loss without facing the financial burden of depreciation on their older belongings.

This form of coverage is particularly significant because it helps maintain the policyholder's standard of living after a loss. In contrast, other options like actual cash value would only provide for the replacement minus depreciation, which could leave the policyholder seeking funds to cover the difference. This notion of 'replacement cost' is designed to offer more comprehensive support in case a loss occurs, facilitating immediate recovery and restoration of personal property.

While modified replacement cost involves some adjustments and may not cover all types of losses effectively, the full replacement cost is straightforward and provides the maximum benefit to the insured.