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What is the difference between Replacement Cost and Actual Cash Value (ACV)?

April 26, 2017actual acv cash value

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What is the difference between Replacement Cost and Actual Cash Value (ACV)?

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Actual cash value only pays to replace your home or property after subtracting a deduction for depreciation. For a higher premium, you can purchase replacement cost coverage, which pays the actual cost of replacing your home or property at the price of what it would cost to purchase that item new, today. Replacement cost coverage premiums are about 10 percent more than ACV. Replacement cost contents is an “endorsement” you should definitely consider.