Property policies commonly refer to losses being settled on an actual-cash-value basis, usually somewhere in the loss-settlement provisions. Fine, but exactly what is actual cash value?
In a recent breakout session at the National Underwriter's ACE Conference in New Orleans, participants were asked to raise their hands if they could give a definition for actual cash value. The common response was, “Actual cash value is the replacement cost minus depreciation.” But is it? And, if it is, what is being depreciated? The cost of the materials? Labor? Overhead and profit?
Furthermore, is actual cash value the same as market value? What is the broad-evidence rule and does it apply? Since many policies do not define actual cash value, the decision often is left to the courts.
Recommended For You
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
