Policy Terms

Actual Cash Value (ACV)

The replacement cost of damaged property minus depreciation due to age, wear, and tear.

Actual Cash Value (ACV) is the replacement cost minus depreciation. For example, if your 5-year-old roof costs $20,000 to replace but has depreciated $8,000, your ACV settlement would be $12,000.

Related Terms

Replacement Cost

The amount it would cost to replace damaged property with new property of similar kind and quality, without deducting for depreciation.

Depreciation

The decrease in value of property over time due to age, wear, tear, and obsolescence.

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