Direct answer
What does Actual cash value mean?
A loss-settlement measure commonly based on replacement cost less depreciation, subject to the policy language.
Exam cue: Expect depreciation to reduce payment compared with replacement-cost coverage.
What does it look like in a question?
New York example
An older appliance is valued by considering the cost of a comparable replacement and applicable depreciation.
Common exam trap
What should you not confuse it with?
Actual cash value is not the property's assessed value.
Related property insurance terms
DeductibleThe portion of a covered loss the insured must bear before the insurer's payment is calculated under the policy.ExclusionA policy provision that removes specified property, causes of loss, people or situations from coverage.HazardA condition that increases the chance or severity of loss.Liability coverageInsurance protection for covered claims that the insured is legally responsible for bodily injury or property damage to others.PerilAn event or cause of loss, such as fire or theft, addressed by the insurance contract.PremiumThe amount charged for insurance coverage for a stated period.
Sources used2 references with section locators
The curriculum citation confirms exam scope. Definition and rule citations support the explanation itself. Links and locators were checked on August 26, 2026.
- Real Estate Salesperson 77-Hour CurriculumNew York State Department of StateSupports: Exam scopeSection: Subject 12, Property Insurance
- Homeowners Insurance: Basic Coverage and Adding CoverageNew York State Department of Financial ServicesSupports: Consumer contextSection: Homeowners coverage, liability and deductibles
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