(239) 772-1287          "Auto, Home & Business Insurance | Florida Insurance Agency"                 Halbrehder Family Agency 601 DEL PRADO BLVD N #11 Cape Coral, FL, 33909

The term “actual cash value” is not as easily defined. Some courts have interpreted the term to mean “fair market value,” which is the amount a buyer would pay a seller if neither were under undue time constraints. Most courts, however, have upheld the insurance industry’s traditional definition: the cost to replace with new property of like kind and quality, less depreciation. Courts have varied in their rulings as to whether or not depreciation includes obsolescence (loss of usefulness as a result of outmoded design, construction, etc.).

Basically actual cash value means your items will be replaced for their worth as used items.  Obviously if the item has been recently purchased the used item value will be much more, than the same item’s value at a few years older.  The newer the item the higher the actual cash value will be.  Cars are a great example of this.  If you purchased a vehicle new for $30,000, then a year later the vehicle book value is $25,000.  The actual cash value of that vehicle at the time of loss is $25,000.