What is the Actual Cash Value?

The type of coverage reimbursement provided by standard property insurance policies. This value is based on the original cost of the subject property minus depreciation.

For example, if a 50-year-old boiler insured for cash value is damaged beyond repair, the insurer will not pay to replace it. Instead, the insurance adjuster will determine the actual cash value of the destroyed boiler.

This actual cash value will start with the original cost of the current boiler and then depreciate the value according to the age and condition of the boiler before the accident. The net amount after depreciating for age and condition is the actual cash value that the property owner will receive from the insurer.

For more information, see also the following entries:

• :Actual Age:
• epreciation:
• :Full Replacement Coverage:
• :Hazard Insurance: