Definition Series for the Insurance Illiterate: Actual Cash Value

Let’s face it when shopping for home insurance, you’ve probably come across a few terms that leave you feeling baffled. Even the explanation of these terms is not very helpful, and you might as well be reading a book in German. You want to be an informed shopper and we want you to feel confident taking insurance matters into your own hands. So, we’ve made it easy for you to do so and we’ve broken down the most common insurance definitions that make you go huuuh? And leave you feeling more ahhh!  

Actual Cash Value [act-chu-all cash val-u]

Definition of Actual Cash Value (ACV)

// the current market value of an item, including any depreciation.

In plain English, ACV means the actual price today, taking into consideration things such as wear, tear, and relevance (demand?) in the market. For example, although your collection of cassette tapes or VHS videos might hold sentimental value to you, they may not be worth very much in today’s economy. RIP 1980’s, it was good while it lasted.


“I’m curious, what is the Actual Cash Value of my Easy Bake Oven? How would you find out?”


Let’s say you bought your Easy-Bake Oven for $30.00, 5 years ago. Depreciation could be agreed upon at 10% per year.  So, in 5 years, the easy bake oven has depreciated 50%. Your easy bake oven could now be worth $15.00. Unfortunately, things tend to devalue as they age and have been used (wear and tear so to speak). If an item is of significant sentimental value or an antique, talk to a professional insurance broker as it might be beneficial to get items like these appraised.

Are your valuables covered? What are you waiting for and get covered today!

October 19, 2020