Replacement Cost Value (RCV)

Definition#

Replacement Cost Value is the dollar amount required to repair or replace damaged property with new materials of comparable kind and quality, calculated at current prices and without subtracting depreciation. RCV is the standard for sizing Coverage A on most modern homeowners policies. Compare with Actual Cash Value (ACV), which deducts depreciation. On a 15-year-old asphalt roof with a 25-year useful life, RCV can be 40-70% higher than ACV.