An “actual cash value” policy or ACV policy, simple means you are only paid on the actual cash value of your property at the time it was damaged.  Example:  A roof is 15 years old.  Brand new it cost 30K, and had a life expectancy of 30 years.  The insurance company would depreciate it’s value by about 50%, thus only paying you around 15K for your claim, less your deductible.  The tragedy of this story is that you were doomed the moment you signed that policy.  While the lure of a cheaper policy sounds intriguing, in the event you file a claim you will never be made whole.  The moral of this story is to never do an ACV policy!