Wood River: 618-254-9363
Brighton: 618-372-3821
Lewis & Clark Insurance Agency Inc. Logo
Quick Quote Form
First Last

Lewis & Clark Insurance Blog

Replacement Cost vs Actual Cash Value (ACV) Feb 6, 2012
Check your policies to see if your claims will be settled on a Replacement Cost basis or an Actual Cash Value (ACV) basis. ACV claims settlements will typically have depreciation withheld AS WELL AS the application of your deductible. This withheld depreciation is not recoverable. In a simplified comparison, let us say that you have damage to a 15 year old roof with a 30 year useful life and your deductible is $500. Say that the cost to replace the roof is $10,000. $5,000 depreciation is withheld and the $500 deductible applied.

The initial settlement paid by the insurance company is $4,500. If your policy is ACV, the claim is closed there. If it is Replacement Cost, you will recover up to the $5,000 depreciation withheld after repairs are completed. Of course, a Replacement Cost policy will require increased coverage amounts and the premium will be higher. You must weigh the cost versus the benefit and make the choice that is right for you.
Email Subscription
RSS Feed

Company Info

Lewis & Clark Insurance
160 East Ferguson Ave
Wood River, IL 62095
Get Map
Brighton Location
Phone: 618-254-9363
Fax: 618-254-9364
Email Us
Brighton Location
309 South Maple St.
Brighton, IL 62012

Phone: 618-372-3821
Fax: 618-372-3324
Get Map
Google Local Blog RSS Feed