What is the difference between ACV (Actual Cash Value) and RC (Replacement Cost) coverage?
Replacement Cost (RC) and Actual Cash Value (ACV) are methods used to determine the amount that will be paid for a loss. Most Homeowners and Commercial Property policies provide you the option of selecting one of these bases to determine how your loss will be calculated. ACV, generally known as market value, is equal to the replacement cost minus any depreciation. It represents the amount you could expect to receive for the item if you sold it in the marketplace and takes into consideration age, wear and tear and condition. RC is defined as the cost to replace the property on the same premises with property of the same like, kind and quality.
