What is the difference between “actual cash value” and “replacement cost”?
Actual Cash Value is the cost to repair or replace with material of like kind and quality less deterioration, depreciation, obsolescence and depletion. Replacement Cost is the cost to repair or replace the covered value of the scheduled item with like kind and quality for the same use. If the item is not repaired or replaced, the company will only pay on an actual cash value basis.
The two major types of insurance property valuation upon which policies are issued, are defined as either actual cash value which at a time of loss considers the age, wear, tear, and depreciation in assessing valuation or replacement cost which considers the cost of replacing or repairing property for the same kind and quality without regard to depreciation. What is the minimum amount of auto insurance that I am required to carry? The State of California mandates that all registered owners of vehicles who are licensed to drive must carry liability insurance for the following minimum limits: Bodily Injury: $15,000 per person and $30,000 per accident. Property Damage: $5,000 per accident. Do I have to insure the full value of my home? Yes. Insurance carriers require policyholders to insure their homes to correspond with what it would reasonably cost to replace it in the event of a total loss based upon the construction type and square footage of the dwelling. Should I purchase a personal
