Replacement Cost vs ACV Calculator

A deductible is a fixed amount you agree to absorb before insurance pays anything, and it applies once per claim regardless of which settlement method the policy uses -- so both Replacement Cost Payout and Actual Cash Value Payout subtract it the same way. This matches how insurers typically settle claims: the deductible isn't doubled just because RCV coverage involves two payment stages (an initial ACV payment plus later recoverable depreciation).

It's a standard simplified approach used for illustration and is reasonably close to how many claims get estimated, but it isn't universal -- real insurers may apply their own published depreciation schedules that assign different rates to different item categories (electronics, furniture, and clothing typically depreciate at different paces), and some use accelerated depreciation in early years rather than a flat straight-line rate. Treat this calculator's Total Depreciation as a reasonable estimate, not your insurer's exact formula.

Usually not in one payment -- most RCV policies pay the Actual Cash Value amount first, then reimburse the remaining "recoverable depreciation" (the gap this calculator shows as RCV Advantage) only after you actually replace the damaged items and submit receipts, typically within a required window such as 180 days. If you never complete the replacement, you may only ever receive the ACV amount even though you're paying for RCV coverage.

It depends on your items' age and how much depreciation they've accumulated -- RCV Advantage grows larger for older items further into their useful life, since ACV pays less on those while RCV still pays full replacement cost. For newer items with little depreciation yet, the gap between RCV and ACV payouts is small, so the added premium for RCV coverage may not be worth it until your possessions have aged enough for the difference to matter.