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Actual cash value (ACV): what it means

Actual cash value (ACV) is a way a homeowners or renters insurance policy pays for damage: it gives you what it costs to repair or replace what was damaged minus depreciation, meaning the value it lost from age, use or wear. That is why it usually pays less than replacement cost, and you cover the difference.

In Spanish it is

Valor real en efectivo (actual cash value)

Also written as: ACV · actual cash value coverage

Verified on October 17, 2026

3 official sources

See the whole dictionary

The full explanation

Many policies pay for your personal belongings this way unless you buy replacement cost coverage. And if you have that coverage, the first check on your claim is often for the actual cash value.

An example

A fire damages Marta's TV, which was several years old. Her renters insurance pays actual cash value: she gets what her used TV was worth, not what a new one costs.

You will see it in…

Your policy's declarations page
The insurer's first check after a claim
Homeowners or renters insurance quotes

Words that go with it

You will rarely see this word alone. These are the ones that show up with it on the same papers.

More guides that use “actual cash value (ACV)”

Still confused by a paper?

A HUD-approved housing counselor can walk you through it. Agencies usually charge little or nothing, many work in Spanish, and they do not sell you anything.

What a housing counselor does See free help

Official sources

We sum up what these official sources say, in plain words. We add no rules they do not state; when a rule changes, the definition and its date change.

1. CFPB · How do home insurance companies pay out claims? (external site) · in English · Verified on October 17, 2026
2. Texas Department of Insurance · Home insurance guide (external site) · in English · Verified on October 17, 2026
3. Washington State Office of the Insurance Commissioner · Learn how home insurance works (external site) · in English · Verified on October 17, 2026