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If your property Insurance has Actual Cash Valuation (A…

If your property Insurance has Actual Cash Valuation (ACV) clause, your damaged property will be
compensated based on:

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A.
Value of item on the date of loss

B.
Replacement with a new item for the old one regardless of condition of lost item

C.
Value of item one month before the loss

D.
Value of item on the date of loss plus 10 percent

Explanation:
In the property and casualty insurance industry, Actual Cash Value (ACV) is a method of valuing insured
property, or the value computed by that method. ACV is computed by subtracting depreciation from
replacement cost on the date of the loss. The depreciation is usually calculated by establishing a useful life of
the item determining what percentage of that life remains. This percentage multiplied by the replacement cost
equals the ACV.
Incorrect Answers:
B: Using Actual Cash Valuation you would not receive a new item as a replacement for the old damaged item.
C: You would receive the calculated value of item on the exact date of the loss, not of the value one month
before the loss.
D: You would receive the calculated value of item on the date of loss only. You would not receive an additional
10%.

https://en.wikipedia.org/wiki/Actual_cash_value


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