“How much?” may seem a straightforward question, but claims adjusters know it’s much more complicated than that. For as long as humans have existed, individuals have valued things differently, monetarily or otherwise.

How are claims adjusters supposed to establish a definitive price? The first step lies in establishing the difference between two key concepts—Replacement Cost Value (RCV) and Actual Cash Value (ACV).

Generally speaking, the replacement cost refers to the amount an entity would pay to replace an asset at the present value. The actual cash value, on the other hand, is the cost to replace an item, less depreciation.

Continue Reading for Free

Register and gain access to:

  • Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.