Why these two terms matter so much
When you file a property damage claim, two concepts drive almost every number on your settlement: Replacement Cost Value (RCV) and Actual Cash Value (ACV). Misunderstand them and you can leave thousands of dollars on the table without ever realizing it.
Replacement Cost Value (RCV)
RCV is what it costs today to repair or replace the damaged property with materials of like kind and quality — no deduction for age or wear. It is the fuller, more favorable measure of your loss.
Actual Cash Value (ACV)
ACV is RCV minus depreciation — a reduction for the age, condition and remaining useful life of the item. A 12-year-old roof, for example, is worth far less on an ACV basis than a new one.
How depreciation is applied
On a replacement-cost policy, insurers typically pay ACV first and hold back the depreciation — called recoverable depreciation. You collect that remaining amount once the repairs are actually completed and documented. Many policyholders never claim it back, effectively gifting the insurer the difference.
The single most common way homeowners lose money is by settling for the ACV check and never recovering the withheld depreciation they were entitled to.
How Cordo Claims helps
We make sure your estimate is written at proper RCV, that depreciation is calculated correctly (not inflated), and that every dollar of recoverable depreciation is claimed back after repairs. If you're unsure whether your settlement reflects RCV or ACV, call us at (877) 552-6736 for a free review.
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