In insurance, the actual cash value is the value of the asset at the current time based on current conditions.
There are some factors by which actual cash value can be evaluated:
Class of construction
Built-in additional features
Square footage area (In case of Property)
These terms can be easily understood with the help of a scenario:
If a person bought a computer 5 years ago for $500 and got it insured. Now it got damaged, so the insured wants to buy another one. But the coverage that the Insured takes for this one is […]