2 Apr 2018

Actual Cash Value

Finance feed by:

CA Akash Agarwal
B.com (Hons),CA
CA in Practice    •    100% (2 votes)   •    14 Year 4 Month  experience

A valuation of the damaged property, i.e. its monetary worth at market value immediately preceding the occurrence of the loss, is called actual cash value of the property. It gives the estimate of the cost of replacement or repair of the damaged asset.

This helps in estimating the extent to which the insurer is liable to pay for the damage. In case of motor insurance, actual cash value can be based on the quotations for similar vehicles available in the market. Generally, the replacement cost minus the depreciation in the value of the asset gives the actual cash value in insurance.

---