What Is the Difference Between ACV and RCV
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Aside from one being about 10% more expensive than the other, these two policies affect a renters insurance claims very differently. When you sign up for renters insurance you’ll be asked which type of coverage you want, actual cash value or replacement value.
An actual cash value policy will reimburse you for the cost of the damaged property. It takes depreciation into consideration so you will not get what you paid for your loss. For example, let’s say your television was stolen. You will get reimbursed for what that television is worth today, not when you bought it. You also have to pay the deductible before being reimbursed.
A replacement value policy will reimburse you for what you buy as a replacement for what you lost. For instance, let’s say your iPhone 7 was stolen out of your car and you bought an iPhone 10. You will only be paid for what an iPhone 7 costs today, not the iPhone 10.
Replacement value renters insurance is more expensive than an actual cash value policy. Only you know which is better for you.