Final answer:
The insurance company will pay $600, which is the cost of replacing the china hutch with a new one under the terms of a replacement value home insurance policy.
Step-by-step explanation:
When your home insurance policy includes replacement value coverage for personal property losses, it means that in the event of a loss, the insurance company will pay you the cost of replacing the item with a new one, regardless of the item's depreciated value.
In the scenario where your china hutch was vandalized and completely destroyed, since it will cost $600 to replace it, despite it having cost you only $400 four years ago, the insurance company will pay you the full $600 to replace the china hutch with a new one, assuming there are no deductibles or coverage limits affecting the claim.
By analogy, the concept of replacement value can be compared to a simplified example of how automobile insurance is calculated. In that context, damages of varying degrees are covered according to policy terms, irrespective of the original price of the vehicle, similar to how your hutch's replacement cost is covered by your home insurance.