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Learn the Difference Between ACV and RCV

Actual cash value, replacement cost value, property insurance, claim
ACV versus RCV

When it comes to buying an insurance policy and filing an insurance claim, you’ll want to be aware of the difference between replacement cost (RCV) and actual cash value (ACV).


If you have Replacement Cost Value coverage, your policy will pay the cost to repair or replace your damaged property without deducting for depreciation.

If you have Actual Cash Value coverage, your policy will pay the depreciated cost to repair or replace your damaged property.

Insurance companies usually calculate depreciation based on the condition of the property when it was lost or damaged, what a new item would cost, and how long the item would normally last.


Insurance carriers generally charge more for an RCV policy versus an ACV policy. You need to discuss with your insurance agent which type of replacement cost you should purchase.

Homeowners insurance policies may cover damage from windstorms and hail. However, some policies exclude this coverage. This is common in coastal areas. You may want to consider buying a separate policy if wind and hail are excluded. Contact your insurance agent or insurance company to find out what your policy covers.

You should also ask your insurer if there are separate deductibles for damage caused by hurricane or wind or hail. Some policies have special deductibles that apply to certain parts of your home, like your roof. Review your homeowners policy declarations page or check with your insurer to learn this information.

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