Insurance term
Actual Cash Value
Actual cash value (ACV) pays you what your damaged property was worth at the time of loss, after subtracting for age and wear. So a five-year-old roof is reimbursed as a five-year-old roof, not a brand-new one. It usually means a lower payout than replacement cost coverage.
Why it matters
Knowing whether your policy pays ACV or replacement cost tells you how big a check to expect — and how much you might owe out of pocket.