Insurance coverage is a vital aspect of homeownership, offering financial protection against unforeseen events like natural disasters, theft, and accidents. Grasping the nuances of different insurance types ensures that your home and belongings are adequately protected. Whether it's shielding your property from wind or hail damage or securing funds to replace stolen items, having the right insurance coverage is essential in times of need.
After a loss, actual cash value (ACV) coverage pays you what your property is worth today. Actual cash value is calculated by taking what it would cost to buy your property new today, and subtracting depreciation for factors such as age, condition and obsolescence.
Replacement cost value (RCV) is the amount it costs to replace your property with new property per insurance calculations, without deducting for depreciation.