"Replacement value" usually does not involve depreciation like "Actual Cash Value" does. If your 21" TV is stolen, the insurer will pay for a new 21" TV. That the original TV was a B&W set from 1970 and the new 2010 TV will be color has no bearing on the claim like ACV would.
Having said that, a policy can combine the use of both terms: Replacement value on the dwelling and ACV on the contents.
Posted: Fri May 21, 2010 08:11 am Post Subject:
"Replacement value" usually does not involve depreciation like "Actual Cash Value" does. If your 21" TV is stolen, the insurer will pay for a new 21" TV. That the original TV was a B&W set from 1970 and the new 2010 TV will be color has no bearing on the claim like ACV would.
Having said that, a policy can combine the use of both terms: Replacement value on the dwelling and ACV on the contents.
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