VALUATIONS

Replacement Cost -

This loss valuation method pays for the cost to repair or replace damaged items with like kind and quality without deduction for depreciation.  You will normally see this valuation with newer, occupied buildings.

Actual Cash Value –

Actual cash value is the amount equal to the replacement cost, minus depreciation to the damaged or stolen property at the time of the loss. It is the actual value for which the property could be sold, which is always less than what it would cost to replace it. This valuation is seen in vacant buildings or older buildings with no updates.

Functional Replacement Cost –

The amount which it would cost to repair or replace the damaged building with less costly common construction materials and methods which are functionally equivalent to obsolete, antique or custom construction materials and methods used in the original construction of the building.  This valuation can be applied to older Victorian type buildings or older restored buildings.