If your policy pays
actual cash value, the company will pay the cost to repair or rebuild your house minus depreciation.
The policy does not define "
actual cash value" or depreciation, or describe the methods employed to calculate ACV.
While it is a replacement cost policy and paid at
actual cash value until repairs are completed, when the difference between RCV and
actual cash value is returned to the insured, the language clearly states that the most paid out is the least (emphasis added) of policy limits, replacement with like kind and quality, or the amount actually spent to repair or replace the damaged building.
ACTUAL CASH VALUE: If the vessel is a total loss, the owner receives the
actual cash value of the vessel at the time of loss, which may be far less than the amount the vessel was purchased for, an amount representing instead the current market value of the vessel.
HO-8: Older Home--Intended for older or unique homes, this policy usually provides reimbursement based upon the home's market value (see
Actual Cash Value, page 264).
The
actual cash value (ACV) amount is determined as replacement cost minus depreciation.
The insurer can pay the
actual cash value of the damaged or stolen property at the time of loss or it has one other option.
The court admonished insurers: "If it [the insurer] wants to determine
actual cash value on the basis of replacement cost less depreciation, all it has to do is say so in the policy." Courts in Pennsylvania have taken the opposite view that ACV means replacement cost, such as in Judge v.
Actual cash value (ACV) is the current depreciated cost.
One tip for building owners is to discern the difference between
actual cash value coverage versus replacement value.
An auto loan/lease coverage endorsement provides coverage for a potential gap between the
actual cash value of an auto and the amount the insured owes on an auto loan or lease.
Table 2001 rates generally lie somewhere between standard (i.e., smoker) and non-smoker mortality rates, for male insureds, of
actual cash value policies.
