Claim guide

RCV vs ACV: what the numbers on your estimate mean

By Carl Browning, independent adjuster, 15+ years

Most property estimates show two values: replacement cost value (RCV) and actual cash value (ACV). Knowing the difference makes it much easier to read your estimate and ask good questions.

Replacement cost value (RCV)

RCV is the estimated cost to repair or replace damaged property with materials of like kind and quality at today's prices.

Depreciation

Depreciation reflects age, wear and condition. A 15-year-old roof is not worth what a new one is, so the estimate subtracts an amount for that.

Actual cash value (ACV)

ACV is RCV minus depreciation. Many policies pay ACV first, then release recoverable depreciation after the work is completed and documented. Whether depreciation is recoverable depends on your policy.

Deductible

Your deductible is subtracted from the payment. Wind and hail deductibles in Texas are often a percentage of your dwelling coverage, so check your declarations page.

Worked example (fictional): RCV $24,850 − depreciation $4,120 = ACV $20,730. Less a $2,500 deductible = an illustrative initial payment of $18,230.

Questions to ask

Is my policy replacement cost or ACV only?
Is the depreciation recoverable, and what do you need to release it?
Is there a deadline to complete repairs?

Keep it all in one place

The Home Insurance Claim Workbook ($12.99) is a printable organizer made for exactly this.

Get it on Etsy

Education only. 24SevenClaims LLC is not a public adjuster and does not give legal advice or coverage determinations. Your policy and claim facts control.