Actual cash value

What it means

Actual cash value is the value of property at the moment it was damaged. United Policyholders describes it as the pre-loss price, sometimes explained as what a willing buyer would have paid you just before the event. In practice, insurers usually start from the cost to replace the item and subtract depreciation for age and wear.

The standard ISO homeowners form (HO 00 03) settles personal property and some other items at actual cash value, not more than the cost to repair or replace. Many policies add a replacement cost endorsement for contents. Your declarations page and policy show which applies.

Why it matters to your claim

If your policy pays only ACV, the depreciation is money you will not get back. That makes the depreciation figure on each line of your estimate worth checking. United Policyholders notes that depreciation is subjective and you can push back on excessive amounts with proof of an item’s value and condition. If your policy pays replacement cost, the first check is often still ACV. In Florida, an insurer must initially pay at least the ACV of a dwelling loss, less the deductible, and pay the rest as work is done (§627.7011). Ask your insurer which method your policy uses. See our water damage claim guide.