What is ACV Value?
“ACV” is an acronym for the term Actual Cash Value. As the term suggests the “Actual Cash Value” is the price of a vehicle that one could buy for cash at a specific time-frame. ACV is often computed by determining its “Replacement Cost” (RC) or the cash price required to buy an identical item and then adding for enhancements and/or by subtracting for depreciation based on age and condition of the property to be replaced to render a fair and accurate value for settlement purposes. One example may be; the cost of new plus or minus appropriate adjustments. In the property and casualty insurance industry, “Actual Cash Value” or ACV is a term for the method of valuing insured property by determining the cost of repairing or replacing damaged property with other of like kind and quality (LKQ) and in the same physical condition; replacement cost less physical depreciation based on age, condition, time in use and obsolescence. Depreciation is based on age and condition. Example: Let’s say you
