What is Actual Cash Value?
Quick answer
Actual cash value (ACV) pays the depreciated value of damaged property at the time of loss — roughly replacement cost minus wear and tear.
Actual cash value (ACV) pays the depreciated value of damaged property at the time of loss — roughly replacement cost minus wear and tear. It almost always pays less than replacement cost coverage.
Examples
- A 12-year-old roof destroyed by hail may pay only 30–40% of a new roof under ACV.
- ACV on a five-year-old TV is roughly what it would sell for used.
- Some policies apply ACV to roofs, siding, and appliances even when the main dwelling is on replacement cost.
Why this matters
ReadMyPolicy catches ACV settlement clauses that quietly slash your payout — especially the roof-only ACV endorsements that have become standard in hail-prone states.
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Frequently asked questions
What is Actual Cash Value?
Actual cash value (ACV) pays the depreciated value of damaged property at the time of loss — roughly replacement cost minus wear and tear. It almost always pays less than replacement cost coverage.
When does Actual Cash Value matter?
ReadMyPolicy catches ACV settlement clauses that quietly slash your payout — especially the roof-only ACV endorsements that have become standard in hail-prone states.
What's an example of Actual Cash Value?
A 12-year-old roof destroyed by hail may pay only 30–40% of a new roof under ACV. ACV on a five-year-old TV is roughly what it would sell for used. Some policies apply ACV to roofs, siding, and appliances even when the main dwelling is on replacement cost.
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