Actual Cash Value (ACV)

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This is an insurance term, also known as ACV or market value. It means that if you have a total loss, the insurance company will pay you the current value of whatever was lost or destroyed. For example, if your car is destroyed, the insurance company will give you just enough money so that you can go into the used-car market and buy another car of the same type and condition as the one that was destroyed. The insurance company will not give you enough money to buy a new car; that's only possible with agreed value, and then only if you insure the car for a sufficiently high value. The principle of ACV only applies if there is a total loss. If there is partial damage you should still receive enough money from the insurance company to repair the damage. Here is a comparison of different coverage options that might be offered under homeowners insurance (however, not every insurance company may offer every option): Minimum coverage: ACV Better: replacement cost Better still: extended replacement cost The best: guaranteed replacement cost