Actual Cash Value (ACV)
A claims-payment method that reimburses depreciated value rather than replacement cost — payout = replacement cost minus depreciation.
Quick answer
Actual Cash Value (ACV): A claims-payment method that reimburses depreciated value rather than replacement cost — payout = replacement cost minus depreciation. Typical cost: ACV policies are 10–25% cheaper than RCV — but pay far less at claim time..
Why it matters
ACV roofs are a major silent shift in homeowners policies; on a 15-year-old roof, a $20,000 loss might pay just $6,000.
Typical cost
ACV policies are 10–25% cheaper than RCV — but pay far less at claim time.
Pros
- • Lower premiums
Cons
- • Devastating gap on aged roofs and systems
- • Many older policies silently converted
Common uses
- • Cost-conscious buyers and aging roofs
Alternatives
Replacement Cost Value (RCV)
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Frequently asked questions
- How do I know if I have ACV or RCV?
- Check your declarations page for 'roof settlement basis' — many carriers now default older roofs to ACV.
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Estimates and guidance are educational. Always confirm with a licensed local professional before making decisions.