What’s the difference between “Actual Replacement Cost” and “Actual Cash Value?”

We get asked this question a lot! Here’s the low down…

Actual Replacement Cost. If you have a claim and decide to repair or replace your lost or damaged property, we’ll cover this no matter how much it costs and without any deduction for depreciation (wear and tear from its use). 

Actual Cash Value. If you have a claim and decide not to repair or replace your lost or damaged property, we can pay you cash for the cost of the item, taking into consideration its condition at the time of loss. For example, if you had a bicycle that was 10 years old, we’d price it based on its age and used condition. The value of the item is reduced because of normal wear and tear over time.