The value of flood damage in the Dwelling Form is based on either Replacement Cost Value (RCV) or Actual Cash Value (ACV).
Replacement Cost Value
Replacement Cost Value is the cost to replace that part of a building that is damaged (without depreciation). To be eligible, three conditions must be met:
- The building must be a single-family dwelling, and
- Be your principal residence, meaning you live there at least 80 percent of the year, and
- Your building coverage is at least 80 percent of the full replacement cost of the building, or is the maximum available for the property under the NFIP.
Actual Cash Value
Actual Cash Value is Replacement Cost Value at the time of loss, less the value of its physical depreciation.
Some building items such as carpeting are always adjusted on an ACV basis. For example, wall-to-wall carpeting could lose between 10–14 percent of its value each year, depending on the quality of the carpeting. This depreciation would be factored in the adjustment.
Personal property is always valued at ACV.
