Insurance term · plain English
ACV vs. RCV
ACV (Actual Cash Value) pays what your damaged stuff was worth right before the loss; RCV (Replacement Cost Value) pays what it costs to replace today.
What it actually is
Most U.S. homeowner policies settle losses in two stages. The carrier first pays ACV — replacement cost minus depreciation — to cover the immediate loss. Once you actually rebuild or replace the damaged property and provide receipts or invoices, the carrier pays the held-back depreciation, getting you to full RCV. Some policies are ACV-only (cheaper premium, smaller payout) — those settle for depreciated value with no recoverable depreciation step.
Why it matters for a claim
If you don’t finish the work, you don’t get the RCV step. That’s a five-figure decision a homeowner often makes without realizing they made it. Contractors who don’t document completion correctly lose their client the held-back depreciation. The wording of the loss-settlement clause in your declarations — especially for Coverage A (dwelling) vs. Coverage C (contents) — decides which side of this you’re on.
Example
A 10-year-old roof with a $20,000 RCV. Depreciation runs ~$8,000. The carrier writes a check for $12,000 ACV. You replace the roof, send the final invoice, and the carrier releases the remaining $8,000 of recoverable depreciation. If you take the $12,000 and pocket it, that $8,000 is gone.
Apply this to your actual policy.
Upload your declarations page — VVON™ surfaces every instance of ACV vs. RCV in your specific contract and shows you exactly what it says, with citations.
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