Replacement Cost is not always available to our customers and the best coverage available through our markets is actual cash value (ACV), or market value. Older buildings and vacant buildings are often covered on an actual cash value basis.
Actual cash value (ACV) definition: ACV is equal to the replacement cost less any depreciation (ACV = replacement cost - depreciation). Another way to think about Actual Cash Value is It represents the dollar amount you could expect to receive for the item if you sold it in the marketplace today.
What Does "Replacement Cost" Mean?
The term "replacement cost" is defined in the policy. It is the cost to replace the property on the same premises with other property of comparable material and quality used for the same purpose. This applies unless the limit of insurance or the cost actually spent to repair or replace the damaged property is less. Refer to your policy for the exact definition and explanation of replacement cost or call your ARMOUR Insurance representative .
What does "Actual Cash Value" Mean?
The insurance industry's traditional definition: the cost to replace with new property of like kind and quality, less depreciation.
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Call us at 780-475-0959 to discuss the Replacement Cost option.
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