Replacement Cost vs. Actual Cash Value: Don't Get This Wrong
February 28, 2025 · 5 min read
Replacement cost pays to rebuild your home and replace belongings at today's prices. Actual cash value (ACV) deducts depreciation — meaning a 10-year-old roof pays out a fraction of what a new one costs.
Always carry replacement cost on the dwelling
Labor and materials inflation has been brutal. ACV policies leave homeowners chronically underinsured.
Personal property: pay the small upgrade
The upgrade from ACV to replacement cost on personal property usually costs $30–$80/year and is almost always worth it.