If your property Insurance has Actual Cash Valuation (ACV) clause, your damaged property will be compensated based on:

The correct answer is A. Value of item on the date of loss. Actual Cash Value (ACV) is calculated as the replacement cost of the item minus depreciation, which effectively equals the fair market value of the item at the time of the loss. This means the insurer compensates you for what the item was actually worth on the date it was…

Submitted by ravi_2018· Apr 18, 2026Risk Identification, Monitoring and Analysis

Question

Options

AValue of item on the date of loss
BReplacement with a new item for the old one regardless of condition of lost item
CValue of item one month before the loss
DValue of item on the date of loss plus 10 percent

How the community answered

(63 responses)

A
89% (56)
B
2% (1)
C
3% (2)
D
6% (4)

Explanation

Actual Cash Value (ACV) is calculated as the replacement cost of the item minus depreciation, which effectively equals the fair market value of the item at the time of the loss. This means the insurer compensates you for what the item was actually worth on the date it was damaged or destroyed, not what it would cost to buy a brand-new replacement. ACV accounts for wear and tear, age, and obsolescence, so an older item will be valued less than a new one.

Topics

#Actual Cash Valuation (ACV)#Insurance#Asset Valuation

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