The Definition of Actual Cash Value
Insurers, working without legislative or judicial direction, created a working definition of the term “actual cash value.” Insurers recognized that “actual cash value” in a fire insurance policy was designed to establish a dollar value for items of destroyed property that were not new at the time of loss. Since the insurers had no easy means to establish the used value of property, they selected the following as their working definition of “actual cash value”
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