Actual Cash Value (ACV) is a term commonly used in insurance and finance to refer to the current market value of an asset at the time of a loss or damage. It represents the amount that an item could be sold for in its current condition, taking into account factors such as age, wear and tear, and depreciation. ACV is typically calculated by subtracting the depreciation from the original cost or value of the asset. In insurance claims, ACV is often used to determine the amount of compensation that will be provided to the policyholder for the loss or damage of their property, after deducting any applicable deductible.
Actual Cash Value (ACV) is a term used in insurance policies to determine the value of damaged or lost property. It refers to the fair market value of the property at the time of the loss, taking into account factors such as age, condition, and depreciation. ACV is calculated by subtracting the depreciation from the replacement cost of the property. This value is used to determine the amount of compensation the insured party will receive from the insurance company. ACV is often used in property insurance claims, where the policyholder is reimbursed for the value of the property at the time of the loss, rather than the cost of replacing it with a new item.
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This glossary post was last updated: 29th March 2024.
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