Have you ever looked at your homeowners, condo, or renters policy and saw that your property, belongings, and/or roof is listed as being insured for Replacement Cost Value (RCV) or Actual Cost Value (ACV)? Have you ever wondered what that means?
Replacement Cost (RCV) is the value to replace an item at today's cost.
Actual Cash Value (ACV) is the value for a similar item at today's cost minus depreciation (replacement cost minus depreciation).
What does this mean? Let's use an example most people have in their house - a couch. Four years ago when you moved into your house, you purchased a new sectional for $2500. Last month, your sectional couch was damaged in a covered claim.
RCV and ACV also affects how your roof is insured too. Some companies only offer RCV coverage for roofs if they were installed within the last 15 years, otherwise the roof is covered for ACV.
Here are some important things you can do: