Homeowners InsuranceHomebuying Glossary
Actual Cash Value
Also known as ACV
A payout based on an item's replacement cost minus depreciation for age and wear.
In plain English
Actual cash value policies pay out what a damaged item is actually worth today, accounting for depreciation — so a 10-year-old roof is reimbursed at its depreciated value, not the cost of a brand-new one.
Why it matters
ACV policies are cheaper but can leave a meaningful gap between your payout and what it actually costs to replace something — read your policy type carefully.
Where you'll run into it
Guides and tools on TheBuyingPath that cover actual cash value in context.
Related terms
Not sure where this fits in your process?
Answer a few questions and get a personalized homebuying roadmap — where you are now, what comes next, and which terms like this one matter at each step.
Start your roadmap