Actual Cash Value (ACV)

What your stuff is worth right now — replacement cost minus depreciation. Pays what the item is worth today, not what a shiny new one costs.

Actual cash value pays what your property is worth at the moment it’s damaged — that is, its replacement cost minus depreciation for age and wear.

If a falling branch destroys a ten-year-old roof, an ACV settlement pays what a ten-year-old roof was worth, not what a brand-new one costs. That can leave a real gap between the check and the repair bill.

ACV policies are cheaper than replacement-cost ones for exactly this reason. If you’d struggle to cover the depreciation out of pocket, paying a little more for replacement-cost coverage is usually worth it.

This is a friendly general explanation, not legal or policy language. Exact coverage depends on your policy, carrier, and state. 🤝

Written and reviewed by the We Insure Things team — licensed independent insurance agents. Last reviewed July 23, 2026. Questions? Ask a licensed agent.