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Replacement cost value is the amount it will take to replace your property or belongings without any deduction for depreciation. Actual cash value is the replacement cost value, minus depreciation. You may also have the option to be insured for replacement cost value on automobile, motorcycle, and boat policies.
Depreciation or holdback is money that will be held by your insurance company until you can prove you have spent your claim money for the full replacement cost of your loss which in the case of a hurricane loss will require you to be out-of-pocket for the deductible percentage as well.
This depreciation is the ?holdback? element that the insurance company reduces from the replacement cost based on the age, condition and item involved. The amount the insurance company pays you right away ? i.e., the replacement cost minus the depreciation ? represents the ?Actual Cash Value? (ACV).
For example, don't say things like ?I think he was speeding,? ?I may have been changing the radio,? or ?He was trying to avoid a pothole.? You must cooperate with the insurance adjuster during their investigation, but you do not have to offer information or speculate about information that you do not have or don't ...
Recoverable depreciation is reimbursed by an insurer only after a replacement is purchased and proof of the purchase is submitted. This is to prevent insurance fraud by customers who might buy a cheaper replacement and pocket the difference.