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CANADIAN INSURANCE TERM

Actual Cash Value

The value of insured property after relevant factors such as depreciation are considered, subject to the policy wording.

Plain-language definition. A real policy, endorsement and provincial law can use more specific wording than a glossary summary.
UpdatedAugust 31, 2026
ByCanada Rate Lab Editorial Team
SourcesIBC + primary sources
MethodologySource-led research
TERM SNAPSHOT
TermActual Cash Value
ContextCanadian insurance
Source typeIndustry glossary
Policy wordingControls claim

What does Actual Cash Value mean?

The value of insured property after relevant factors such as depreciation are considered, subject to the policy wording.

Actual cash value can be materially lower than the amount needed to buy a comparable new replacement today.

EXAMPLE

Actual Cash Value in practice

A five-year-old television may have a depreciated actual cash value below the cost of purchasing a similar new television.

Related Canada Rate Lab guides

Replacement Cost vs Actual Cash ValueTenant InsuranceTenant Contents Estimator
Browse the glossary A–Z →

Replacement Cost

A method of valuing insured property based on the cost to replace it with comparable property, subject to policy conditions, limits and settlement rules.

Depreciation

A reduction in the value of property associated with factors such as age, condition, wear or obsolescence.

Claim

A request by an insured person or other eligible claimant for payment, benefits or another response under an insurance policy after a loss or event.

Primary reference

Insurance Bureau of Canada — Insurance GlossaryCanada Rate Lab — Sources & Data