Glossary of Homeowners Insurance Terms
Understanding Homeowners Insurance Policies is Half the Battle
Actual Cash Value (ACV)
Actual Cash Value is the amount an insurance company will pay to repair or replace damaged property, minus depreciation. This means they subtract value for wear and tear or age of the item. For example, if your 10-year-old roof is damaged, the payout may be based on the current value of a 10-year-old roof, not the cost of a new one. ACV generally results in lower premiums but higher out-of-pocket costs after a loss.
Replacement Cost
Replacement Cost refers to the amount it would take to replace or repair your home or belongings at today's prices, without deducting for depreciation. This means you would receive enough money to replace items with new ones of similar kind and quality. It usually costs more in premiums but provides better protection because you’re more likely to recover your actual loss.
Title or Question
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Title or Question
This is the text area for this paragraph. To change it, simply click and start typing. Describe the item or answer the question so that site visitors who are interested get more information. You can emphasize this text with bullets, italics or bold, and add links. Once you've added your content, you can customize its design.
Actual Cash Value (ACV)
Actual Cash Value is the amount an insurance company will pay to repair or replace damaged property, minus depreciation. This means they subtract value for wear and tear or age of the item. For example, if your 10-year-old roof is damaged, the payout may be based on the current value of a 10-year-old roof, not the cost of a new one. ACV generally results in lower premiums but higher out-of-pocket costs after a loss.
Replacement Cost
Replacement Cost refers to the amount it would take to replace or repair your home or belongings at today's prices, without deducting for depreciation. This means you would receive enough money to replace items with new ones of similar kind and quality. It usually costs more in premiums but provides better protection because you’re more likely to recover your actual loss.
Title or Question
This is the text area for this paragraph. To change it, simply click and start typing. Describe the item or answer the question so that site visitors who are interested get more information. You can emphasize this text with bullets, italics or bold, and add links. Once you've added your content, you can customize its design.
Title or Question
This is the text area for this paragraph. To change it, simply click and start typing. Describe the item or answer the question so that site visitors who are interested get more information. You can emphasize this text with bullets, italics or bold, and add links. Once you've added your content, you can customize its design.