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Actual Cash Value (ACV) Calculator for Insurance Claims

Estimate the actual cash value of a damaged or stolen item — replacement cost minus depreciation — and compare what an ACV policy and a replacement-cost policy would pay after the deductible.

Replacement cost (same item new today)

Age of the item (years)

Useful life (years)

Depreciation method

Yearly rate for declining balance

Minimum value kept (salvage floor)

Deductible

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How it works

Straight-line: depreciation % = min(age ÷ useful life, 1 − floor) · declining balance: remaining value % = max((1 − rate)^age, floor) · ACV = replacement cost × (1 − depreciation %) · ACV payout = ACV − deductible · replacement-cost payout = replacement cost − deductible

Actual cash value is what an insurer pays on many claims: the cost to replace the item with a new one of like kind and quality, minus depreciation for age and wear. Adjusters typically use straight-line depreciation over the item’s expected useful life, often with a floor so used items never fall to zero. Replacement-cost policies first pay the ACV and then release the “recoverable depreciation” once you actually replace the item. Ask your adjuster for the depreciation schedule they use.

Worked example

A laptop that would cost 1,200 to replace today is 3 years old with a 10-year useful life. Straight-line depreciation is 3 ÷ 10 = 30.00%, or 360.00, so the actual cash value is 840.00. After a 250 deductible an ACV policy pays 590.00, while a replacement-cost policy pays 950.00 once you replace it.

Sources: Wikipedia — Actual cash value · United Policyholders — Depreciation basics

Frequently asked questions

How is actual cash value calculated?

ACV = replacement cost − depreciation. With straight-line depreciation, an item 3 years into a 10-year life has lost 30% of its value, so a 1,200 item is worth 840.

What is the difference between ACV and replacement cost?

ACV pays the depreciated value; replacement cost pays what it takes to buy the same item new (usually after you replace it). Replacement-cost coverage costs more but avoids the depreciation gap.

Can I dispute the depreciation on my claim?

Yes. Ask for the useful-life table used, show the item’s condition, upgrades or recent purchase receipts, and point out comparable used prices. Policyholder groups such as United Policyholders publish guidance.

Is labor depreciated too?

It depends on the policy and local law — some places forbid depreciating labor on building repairs. Check your policy wording and local rules.

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Educational estimate, not insurance advice. Policy wording, deductibles, depreciation schedules, surcharges and clauses differ by insurer and country — read your policy and ask your insurer or a licensed agent before deciding.