Actual cash value vs. replacement cost: Which one’s best for you?

Posted in Home

Imagine this situation. About five years ago, you bought a new flat screen TV for over $1,000. Then after a thunderstorm rolls through, it won’t turn on. It’s destroyed.

So, you file a claim with your insurance company, but you’re left confused when your settlement check is less than $1,000. After all, that’s what you paid for the TV, right?

It all comes down to the type of contents coverage you’ve selected in your homeowners insurance policy: actual cash value or replacement cost value.

But you can avoid this confusing situation by reviewing your coverage options with your independent insurance agent ahead of time. Check out our infographic about actual cash value and replacement cost to help you understand the difference so you can choose the right coverage for your home insurance policy.

ACV vs. Replacement Cost
 
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