What does ACV stand for?

• A. Actual Cash Value
• B. Actual Cost Value
• C. Aggregate Current Value
• D. All Costs Valued

Answer: (A)

Actual Cash Value is the amount you’re considered to be value for at the time of a loss, reflecting depreciation. In insurance terms, it’s basically the replacement cost of an item minus wear and age. So, if you had a damaged item that would cost $1,000 to replace new today but it’s been used for several years, the ACV might be much less—roughly the amount you’d need to buy a similar used item or the replacement cost minus depreciation, depending on the policy. This differs from replacement cost value, which would pay to replace with a new item without subtracting for depreciation.

The other phrases aren’t standard terms used in property insurance. They don’t represent the typical concept of valuing a loss after accounting for wear and age.