How Flood Damages Are Valued
How Flood Covered Damages Are Evaluated
Flood covered damages are based on Replacement Cost Value (RCV) or Actual Cash Value (ACV).
Replacement Cost Value
Replacement Cost Value (RCV) is the cost without depreciation to replace parts of a building that is damaged. Generally three conditions must be met:
- The building must be a single-family dwelling
- The building must be your principal residence at the time of loss, meaning you live there at least 80 percent of the year
- 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 (ACV) is Replacement Cost Value at the time of loss less the value of its physical depreciation. Some building items such as appliances and carpeting are always adjusted on an ACV basis. For example, wall-to-wall carpeting could lose from 10 to 14 percent of its value each year, depending on the quality of the carpeting. This depreciation would be factored into the adjustment. Personal property is always valued at ACV.
Claims Process
The actual process of evaluating covered flood damages is the responsibility of a claims adjuster that works for the insurance company who is dispatched once a notice of claim is received from an insured client.