What is replacement cost versus actual cash value on a claim?

Two different ways of valuing a property loss. Actual cash value (ACV). The cost to replace the damaged item minus depreciation. A 12-year-old roof loss might pay only 40 percent of replacement cost because the roof had already lost most of its useful life. ACV reflects fair market value at the time of loss, not what it will cost to fix. Replacement cost (RCV). The cost to replace the damaged item with new materials of like kind and quality, with no depreciation. RCV requires that you actually rebuild or replace; carriers typically pay ACV first and release the depreciation withholding once you complete the work and provide receipts. Which one applies to you. Read your declarations page. Most homeowners policies offer RCV as standard, but older or specialty policies sometimes default to ACV. Auto is almost always ACV (the value of the vehicle now). Personal property is often ACV unless you specifically endorsed RCV.