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Actual Cash Value or ACV is the cost to replace an item at the time of loss after subtracting the depreciation. In other words it is the fair or reasonable price that can be obtained for any item or property in the ordinary course of business, not under duress or exigency. This is a common method for determining the amount of reimbursement for a loss.This is also referred to as fair market value.
Example of a state statute (Virginia) defining Actual Cash Value. Va. Code Ann. § 46.2-1600
"Actual cash value," as applied to a vehicle, means the retail cash value of the vehicle prior to damage as determined, using recognized evaluation sources, either (i) by an insurance company responsible for paying a claim or (ii) if no insurance company is responsible therefore, by the Department.