What is Loss Settlement on Dwelling and Contents?
You may select either Replacement Cost (RC) terms or Actual Cash Value (ACV) terms for Loss Settlement on your residence and your contents. Replacement Cost (RC) determines the valuation of the property according to the cost of replacing it with property of a like kind and quality with no deduction for depreciation. (Note: RC is only available for contents under Special or Elite Perils.) Actual Cash Value (ACV) determines the valuation of the property based on the cost of repairing or replacing it with property of like kind and quality. Usually, actual cash value equals the current replacement cost minus depreciation (based on age, condition, time in use, and obsolescence). Other factors, such as the nature and market value of the property, may be considered.
