Professional services
Insurance Actual Cash Value Calculator
Works actual cash value, which is replacement cost less depreciation.
Result
An estimating tool, not insurance advice and not a quote. Actual premiums are set by underwriting on factors no calculator sees: claims history, credit and loss data, exact location, construction, contract requirements and the insurer's own appetite. What cover you need is a question for a licensed broker who has looked at your situation. Insurers apply their own depreciation schedules by item category and the method varies. Replacement cost policies often pay actual cash value first and release the depreciation holdback only after the item is actually replaced and receipts are provided, which catches people who expected a single cheque.
Get a Free Business AuditHow the calculation works
Replacement cost reduced for depreciation based on age against expected useful life, giving the actual cash value. A policy settling on this basis pays the depreciated figure rather than the cost of replacing with new, and the gap widens with the age of the item, which is why the settlement basis matters more than the limit on older property.
What moves the number
- Current replacement cost of the item.
- Age against expected useful life.
- The depreciation method the policy applies.
- Whether the policy settles on this basis at all.
Where this one goes wrong
On an older roof or an older building component the difference between actual cash value and replacement cost can be most of the claim, which means the settlement basis is the single most consequential term in the policy for that loss. Check whether a roof is settled differently from the rest of the dwelling, because some policies apply actual cash value to roofs specifically while settling everything else at replacement cost, and that is rarely prominent.
Before you quote
- Check the settlement basis separately for roofs and older components.
- Understand how depreciation is calculated under the policy.
- Compare the premium difference against the exposure it creates.
Questions
About this calculator
What is actual cash value?
Replacement cost less depreciation for age and wear. A policy settling on this basis pays the depreciated figure rather than the cost of replacing with new, and the gap widens with age, which is why it matters most on older property.
Why does it matter for roofs?
Because some policies settle roofs on actual cash value while settling everything else at replacement cost, and on an older roof that difference can be most of the claim. It is rarely prominent in the paperwork and is worth asking about directly.
Is replacement cost cover worth the extra premium?
Compare the premium difference against the depreciation you would absorb on a likely claim. For older property the exposure is large, which usually makes the answer yes, but it depends on the age of what is insured and the gap in price.
The formula
actual cash value = replacement cost x (1 - age / useful life), floored at the retained minimum
Put this calculator on your site
Free to embed. Paste this where you want it to appear. It stays up to date automatically because it loads from BDEVY.
Please keep the attribution line. It is the only thing we ask in return.
How to use this calculator
- Replacement cost today ($). Enter your own figure; the page starts at $18,000.
- Age of the item (years). Enter your own figure; the page starts at 9.
- Expected useful life (years). Enter your own figure; the page starts at 20.
- Minimum value retained (%). Most policies do not depreciate to zero.
- Deductible ($). Enter your own figure; the page starts at $1,000.
The result updates as you type, so you can try a figure, see what it does to actual cash value payout, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Replacement cost today | $18,000 |
| Age of the item (years) | 9 |
| Expected useful life (years) | 20 |
| Minimum value retained | 20% |
| Deductible | $1,000 |
What comes out
| Result | Value |
|---|---|
| Actual cash value payout main result | $8,900 |
| Actual cash value | $9,900 |
| Depreciation applied | $8,100 |
| Replacement cost payout | $17,000 |
| Out of pocket with ACV cover | $9,100 |
Actual cash value is $9,900 after $8,100 of depreciation, so an ACV policy pays $8,900 against $17,000 on replacement cost cover. That leaves $9,100 out of pocket to actually replace it.
How sensitive the answer is
Holding everything else steady and changing only replacement cost today, this is what happens to actual cash value payout. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Replacement cost today ($) | Actual cash value payout |
|---|---|
| $9,000 | $3,950 |
| $13,500 | $6,425 |
| $18,000 example above | $8,900 |
| $27,000 | $13,850 |
| $36,000 | $18,800 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Replacement cost today ($)
- A money amount, starting at $18,000.
- Age of the item (years)
- A number, between 0 and 100, starting at 9.
- Expected useful life (years)
- A number, between 0 and 100, starting at 20.
- Minimum value retained (%)
- Most policies do not depreciate to zero.
- Deductible ($)
- A money amount, starting at $1,000.
What the results tell you
| Result | What it is |
|---|---|
| Actual cash value payout | The headline result. A money figure. |
| Actual cash value | A money figure. |
| Depreciation applied | A money figure. |
| Replacement cost payout | A money figure. |
| Out of pocket with ACV cover | A money figure. |
Keep going
Related calculators
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.