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

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

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

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