Final answer:
Under a flood policy, contents are usually settled at actual cash value, which takes depreciation into account. Optional replacement cost coverage can be added for an additional cost.
Step-by-step explanation:
Under a flood policy, contents are typically settled on an actual cash value (ACV) basis, rather than replacement cost value (RCV). This means that the insurance company will consider the age and condition of the contents to determine depreciation and will pay the cost to replace the property minus this depreciation. However, some policies may offer replacement cost coverage for contents, but this is usually optional and must be specifically added to the policy for an additional premium.