Feature article originally published in The Appraisal Journal Fall 2013 issue.
8 pages, PDF Download
This article provides background on the issue of actual cash value in valuation for insurance purposes.
Real estate appraisers may be called upon to determine the actual cash value of structures for insurance purposes, often in conjunction with litigation between an insurer and insured. Unfortunately, actual cash value (ACV) is rarely defined within insurance policies, and there is no uniformly accepted definition of ACV. Instructions from the court or client may simplify the problem, but in cases where there is no specific instruction, the appraiser must use his or her judgment in defining ACV. The article outlines the appraiser’s obligations in defining the term, breaks down the definition to its basic components, and recommends a solution to the problem.
David L. Clark, MAI
Larry W. Stark, MAI
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