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What is Actual Cash Value?
When replacing something that has been stolen or damaged, there are two options: actual cash value and replacement cost. Although extremely similar, there is one difference causing the two to stand separate. While one coverage reflects a deduction for depreciation the other does not. Read more to see the difference!
What is Actual Cash Value?
As mentioned above, actual cash value or ACV is a way of determining a value for insuring property when its depreciation is taken into consideration. If the damaged vehicle is worth less than what your new vehicle is going to cost, you will have to pay the difference out of pocket. ACV allows you to get a tractor or trailer which is like kind, make, model, mileage, and appearance off of a dealer’s lot. This is how adjusters determine the value of your property in the event of a loss.
What is Replacement Cost?
If you purchase a replacement cost policy, depreciation is not taken into account, so you would receive payment for an item equal to that of your damaged or stolen item. This coverage would cost more than other coverages such as ACV, but for big-ticket items, it may be a better option if you can afford it.
No matter how you wish to be covered, our team at Bobtail Insurance Group is ready to answer all questions. We will walk you through both actual cash value and replacement cost to guarantee that you are insured with the right plan for you! Contact BIG at 1-833-4-RIG-INS for more information!