what is the difference between actual cash value and replacement value?
Total Comments: 2
Posted: Wed Nov 18, 2009 08:43 pm Post Subject:
The only difference between the two is a deduction for depreciation on an ACV.
Posted: Wed Nov 18, 2009 08:56 pm Post Subject:
An easier way to understand it is that RCV is what it would cost to replace the item at the time it was damaged. ACV is what damaged item itself is worth at the time of the loss. A house might be worth $200k (ACV) but to build a duplicate one would probably cost much more (RCV). A 10 year old microwave might be worth $10 (ACV). But to replace it with a brand new one might cost $50 (RCV)
Posted: Wed Nov 18, 2009 08:43 pm Post Subject:
The only difference between the two is a deduction for depreciation on an ACV.
Posted: Wed Nov 18, 2009 08:56 pm Post Subject:
An easier way to understand it is that RCV is what it would cost to replace the item at the time it was damaged. ACV is what damaged item itself is worth at the time of the loss. A house might be worth $200k (ACV) but to build a duplicate one would probably cost much more (RCV). A 10 year old microwave might be worth $10 (ACV). But to replace it with a brand new one might cost $50 (RCV)
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