Insurance Term
Actual Cash Value (ACV)
The replacement cost of damaged property minus physical depreciation at the time of loss.
Detailed Explanation
ACV accounts for the age, condition, and wear-and-tear of property. It differs from Replacement Cost, which pays to replace the item with brand-new material without deducting depreciation.
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Practice QuestionEasy
Which of the following best describes the concept of Actual Cash Value (ACV)?
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