Key takeaway
A straightforward explanation of ACV, replacement cost, depreciation, deductibles, and why policy details matter.
What actual cash value means
Actual cash value generally reflects replacement cost minus depreciation, subject to the deductible and policy terms.
What replacement cost coverage means
Replacement cost coverage may allow eligible depreciation to be recovered after covered work is completed and documented, subject to the policy.
What depreciation means
Depreciation is a reduction based on age, condition, expected life, and other factors used by the insurer.
The deductible still applies
The deductible is typically the policyholder’s responsibility and is subtracted from covered claim payments.
Read the actual policy
Endorsements, exclusions, roof-payment schedules, cosmetic-damage limitations, and settlement terms can significantly change coverage.
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