Actual Cash Value (ACV) in Florida Insurance
Actual cash value is an insurance valuation method that pays the replacement cost of damaged property minus depreciation. For Florida homeowners facing hurricane, wind, and flood risks, understanding the difference between ACV and replacement cost coverage is critical to ensuring adequate protection.
ACV vs. Replacement Cost
A replacement cost policy pays the full cost to rebuild or repair with materials of similar quality, without deducting for depreciation. An ACV policy reduces that amount based on the age and condition of the damaged property. On a 15-year-old roof destroyed by a hurricane, replacement cost coverage might pay $25,000 for a new roof, while ACV coverage might pay only $10,000 after depreciation.
Florida's Roof Coverage Reforms
Senate Bill 2-D (2022) allowed Florida insurers to offer ACV-only coverage for roofs older than 10 years. This was part of broader reforms designed to stabilize Florida's property insurance market after multiple carrier insolvencies. Homeowners with older roofs should review their policies carefully and consider the financial impact of an ACV roof endorsement before accepting lower premiums.
Related Terms
Barnes Walker Litigation
Barnes Walker represents Florida policyholders in insurance coverage disputes and bad faith claims. Contact our team if your insurer has undervalued a claim using ACV methodology.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC