The Supreme Court of North Carolina has held that the term Actual Cash Value (ACV) in a homeowners insurance policy is unambiguous and is calculated by considering both labor and material costs. The case is  Accardi v. Hartford Underwriters Ins. Co., No. 42A19 (N.C. Feb. 28, 2020).

Thomas Accardi owned a home that was insured by a homeowners insurance policy provided by Hartford Underwriters Ins. Co. (Hartford.) The Accardi home was damaged in a hailstorm in September of 2017. The storm caused damage to the roof, siding, and garage of the home which all required repair and restoration.

The North Carolina Department of Insurance consumer guide to homeowner's insurance states that when a homeowner selects homeowners insurance, they can choose to insure based on ACV or replacement cost value (RCV) basis with ACV being the amount it would cost to repair or replace damage after depreciation, and RCV being the amount it would cost to replace or rebuild with materials of similar kind and quality, at today's prices, without deducting for depreciation. The insurance policy in play here was a hybrid of those two, providing that the insurer would initially pay the ACV and then reimburse the plaintiff for any extra money paid to repair or replace the item, up to the RCV. A separate endorsement for roof damage stated that ACV would be calculated by deducting depreciation from the cost to repair or replace the damaged roof.