Replacement Cash Value (RCV)

The difference between Actual Cash Value (“ACV”) and Replacement Cash Value (“RCV”), and whether increased costs to comply with building codes are part of RCV can be significant in cases involving a proper loss measurement determination. In Sierra Pacific Power Company v. Ram Hartford Steam Boiler Inspection & Insurance Company, 2012 U.S. App. LEXIS

Property insurance policies typically require that the insured repair or replace the damaged property before recovering on a replacement cost value (RCV) basis.  The difference between RCV versus actual cash value (ACV) can be substantial, especially where an older building is involved.  The Indiana Court of Appeals recently held that an insurer can waive its