Home owner's insurance question

Reading through my policy it would appear that through the personal property section an audio system is covered for loss.  No special rider is necessary.  But the replacement cost section states that the insurance company won't pay until you actually replace your stereo system.  If one makes a big claim, let's say $100,000, how does one pay this first if you're going to get paid afterwards?  What if you don't have the money to re-buy your system or you choose not to replace it?  Can any insurance experts explain to me how these home owner policies actually work?