Which Coverage Is Better For Your Homeowners Policy in Georgia: Replacement Cost (RCV) Or Actual Cash Value (ACV)?

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Let's face it, insurance can be complicating. Not only are insurance terms and definitions  exclusive to the industry but sometimes it is specific to each individual insurance company on what they mean! If you're like most folks, you've looked over your policy and weren't 100% sure on what was being said. That's OK! This means you're normal or you don't work in insurance. 

Today we're diving into 2 different coverages that are often misunderstood with home insurance policies in Georgia: Replacement cost (RCV) and Actual Cash Value (ACV). These are 2 common options that are used to determine how claims are paid. 

So What's The Difference?

Replacement Cost (RCV)

Replacement cost coverage essentially means that, when a claim is covered, the insurance company will pay the full cost to fix or replace something minus your deductible. This is the more expensive of the two options and the option that we recommend for all homeowners in Georgia whenever possible. 

Actual Cash Value (ACV)

Actual cash value coverage essentially means that, when a claim is covered, the insurance company will deduct your deductible AND depreciation from what they are willing to pay to fix or replace something with your home. For example: $10,000 in damages minus a $1,000 deductible minus $5,000 for depreciation means that the insurance company will only pay $4,000 for a claim that resulted in $10,000 in damages. This is the least expensive of the 2 options and we highly suggest staying away from this coverage whenever possible.

So What Coverage Should You Have For Your Home Insurance In Georgia?

Replacement cost coverage- without a doubt. Sometimes, depending on the condition of your home, past claims history, location, home characteristics, etc., it may not be an option. But for 95% of homeowners in Georgia, you should take advantage of the option to have replacement cost coverage for your home and personal property. 

Here at the Roberts Insurance Group, we're dedicated to getting our clients the very best value for their home, auto, and business insurance. We're an independent insurance agency located in Canton, GA and help clients through the state. 

If you'd like to get a better value on your insurance, give us a call today at 678-250-8133 or click below and we'll get started working for you!

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