Actual Cash Value (ACV) Calculator
Calculate the actual cash value of insured property by subtracting physical depreciation from the current replacement cost.
How to use this tool
- Enter replacement cost (new), current age of asset and expected useful life in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your actual cash value (acv) and the full breakdown beneath it.
Formula
Depreciation % = (Age / Useful Life) × 100
Depreciation $ = Replacement Cost × (Age / Useful Life)
ACV = Replacement Cost − Depreciation $
How it works
Actual Cash Value (ACV) is the standard insurance payout method for property losses. It is calculated by subtracting physical depreciation — determined by the asset's age relative to its expected useful life — from the current cost to replace the item with a new equivalent (replacement cost).
This straight-line ACV method is the most widely used approach by insurance adjusters, though actual policies may use different depreciation schedules or factor in condition, market value, or functional obsolescence. ACV settlements are typically lower than replacement cost value (RCV) settlements.
Worked example
5-year-old item, $20,000 replacement cost, 10-year useful life
- Depreciation % = 5 / 10 × 100 = 50%.
- Depreciation $ = $20,000 × 50% = $10,000.
- ACV = $20,000 − $10,000 = $10,000.
Actual Cash Value = $10,000, representing 50% of the replacement cost after 5 years of use.
Key terms
- Actual Cash Value (ACV)
- The fair market value of insured property at the time of loss, equal to replacement cost minus depreciation.
- Replacement Cost Value (RCV)
- The cost to replace a damaged or destroyed item with a new equivalent at current prices, without depreciation deduction.
- Physical Depreciation
- The reduction in value due to age, wear, and deterioration over the asset's useful life.
- Useful Life
- The estimated total lifespan of an item as defined by the insurer or industry standard for depreciation purposes.