Frequently Asked Questions

Reviewed by Wyatt Crane (WC), Editor-in-Chief — Property Damage & Insurance Claims Practice. Updated May 2026.

What is the difference between RCV and ACV?

Replacement cost value (RCV) pays what it would cost to replace the damaged property with a new equivalent at today's prices, without deducting for depreciation. Actual cash value (ACV) is the property's fair market value immediately before the damage — essentially, replacement cost minus accumulated depreciation for age, wear, and obsolescence. The difference between these two figures can be substantial. A 10-year-old roof might cost $15,000 to replace today (RCV), but its ACV after depreciation could be $7,500 or less. Whether your policy pays RCV or ACV is the single most important factor in determining how much you receive from a first-party property claim.

When is a vehicle declared a total loss?

A vehicle is typically declared a total loss when the cost of repairs exceeds the vehicle's pre-damage actual cash value (or a set percentage of ACV, which varies by state). Many states set total-loss thresholds between 75% and 100% of ACV — meaning if repairs would cost 75% or more of what the car was worth before the accident, the insurer can declare it a total loss and pay ACV rather than repair costs. For first-party claims (your own collision coverage), the insurer pays ACV minus your deductible. For third-party claims (against the at-fault driver), the insurer pays the full ACV with no deductible offset. You are entitled to keep the salvage title vehicle in most states if you prefer, but the insurer will deduct the salvage value from the payout.

Can I dispute the insurer's ACV or depreciation calculation?

Yes, and you should if the numbers appear low. Start by requesting the adjuster's complete depreciation worksheet — insurers are generally required to provide this. Review the depreciation rate applied to each item and compare it against the actual condition and market value of the property. For vehicles, research comparable vehicles (same make, model, year, mileage, and condition) on Craigslist, Autotrader, and KBB to document what similar vehicles actually sell for in your area. For real property, get independent contractor repair estimates from licensed contractors. For a significant dispute, invoke the appraisal clause in your policy — most property insurance policies allow both sides to appoint independent appraisers, with a neutral umpire resolving disagreements. This process is faster and cheaper than litigation.

What is a diminished value claim and who pays it?

Diminished value (DV) is the reduction in a vehicle's market value that persists after it has been repaired following an accident, due solely to its accident history. A buyer paying market price for a comparable vehicle with no accident history will pay less for your vehicle even after full repair, and that reduction in value is recoverable from the at-fault driver's liability insurance in most states. Most first-party policies (your own insurer) expressly exclude diminished value claims — Georgia and a small number of other states are exceptions. To pursue DV: get an independent appraisal from a certified DV appraiser, calculate the 17c formula as a baseline, and submit both to the at-fault driver's insurer. Insurers routinely lowball or deny DV claims initially; persistence, documentation, and sometimes legal representation produce better results.

Does homeowners insurance cover flood damage?

No. Standard homeowners insurance policies exclude flood damage from rising external water sources — storms, overflowing rivers, coastal surge. This is one of the most consequential coverage gaps in property insurance. Flood coverage must be purchased separately through the National Flood Insurance Program (NFIP), administered by FEMA, or through private flood insurers. NFIP policies have building coverage limits of $250,000 and contents limits of $100,000. The distinction between flood damage and water damage from internal causes (a burst pipe, a roof leak from wind-driven rain) matters significantly: internal water damage is typically covered, while external floodwater damage is not. Read your policy's water and flood exclusions carefully.

What are consequential damages in a property damage claim?

Consequential damages are losses beyond the direct replacement or repair value of the property itself. In third-party claims (against the at-fault party), you may be entitled to: rental car costs or loss-of-use damages while your vehicle is being repaired; hotel or temporary housing costs if your home is uninhabitable; lost income if the damaged property was used in your business; and other reasonably foreseeable economic losses caused by the damage. First-party insurance claims are more limited — your policy language governs what consequential damages, if any, are covered. Read your policy's "additional living expenses" or "loss of use" provisions carefully for homeowners claims, and your rental reimbursement endorsement for auto claims.

What is the appraisal clause and how does it work?

Most property insurance policies contain an appraisal clause that provides an alternative to litigation for resolving valuation disputes. If you and your insurer disagree on the amount of the loss, either party can invoke the appraisal process. Each side appoints a competent, independent appraiser. The two appraisers attempt to agree on a value. If they cannot, they select a neutral umpire. The umpire's decision (or the agreement of any two of the three parties) is binding. Invoking the appraisal clause typically requires providing written notice and participating in good faith. The process is faster and less expensive than filing suit, and appraisal outcomes frequently favor policyholders over the insurer's initial valuation.

Should I hire a public adjuster?

A public adjuster is a licensed professional who represents policyholders (not insurance companies) in first-party property damage claims. They inspect the damage, document losses, prepare detailed claim submissions, and negotiate with the insurance company's adjuster on your behalf. Public adjusters typically work on contingency, taking 10–15% of the final settlement. They are most cost-effective on significant commercial or residential property claims where the complexity, the documentation burden, and the potential for an underpaid settlement justify their fee. For small claims or straightforward auto losses, the cost may not be justified. For large hurricane, fire, or flood claims — particularly claims where the initial insurer offer is substantially below your expected recovery — a public adjuster can significantly increase your outcome.

See the claims process guide, the RCV vs. ACV guide, or return to the calculator.