Glossary
Actual cash value
What a car was worth just before the crash: the cost to replace it minus depreciation for age and wear. It is the usual measure of a total-loss payment.
General information, not legal advice. Talk to a licensed attorney in your state.
Quick answer
Actual cash value (ACV) is what your car was worth just before the crash. Insurers usually work it out as the cost to replace the car with a similar one, minus depreciation for age, mileage and wear. It is generally the most an insurer will pay for your car, whether it is repaired or totaled.
In a car accident claim#
ACV matters most when a car becomes a Total loss. When an insurer decides a damaged car is not worth repairing, usually because repairs would cost about as much as the car is worth or more. The insurer pays the car's value instead. Glossary. The Texas Department of Insurance says a car is likely to be totaled when the cost to repair it is about the same as or more than its value. Maryland draws the line at repairs costing 75% or more of the car's fair market value. Once a car is totaled, the insurer pays its ACV, not the price of a new car of the same model.
ACV also caps repair payments: insurers pay for repairs only up to the car's actual cash value. Because ACV is an estimate, it can be disputed. State insurance departments say you can ask how the figure was reached and show prices for similar cars sold near you. Our guide to property damage and diminished value covers the full car claim, and the insurance adjuster guide explains who sets the offer.
Example#
Related terms#
Questions people ask
Is actual cash value the same as replacement cost?
No. Replacement cost is what it would take to buy a similar car today, while actual cash value subtracts depreciation. For a totaled car, the payment is usually the value of a used car of the same age and condition, so check what your policy says.
Can you dispute an actual cash value offer?
Yes. Insurers may raise an offer when you show that similar cars sell for more, for example with written dealer quotes. Some policies also have an appraisal clause for disagreements about value.
Does actual cash value include sales tax and fees?
It depends on the state and the policy. In Maryland, for example, a total-loss cash offer must include all applicable taxes and registration fees.
Sources
- Texas Department of Insurance, Auto insurance guide — actual cash value, depreciation and totaled cars
- Washington State Office of the Insurance Commissioner, What happens after your car gets totaled — how insurers value a totaled car and how to dispute it
- Texas Department of Insurance, My car was totaled! Now what? — as of October 2026
- Maryland Insurance Administration, Understanding Total Loss — as of October 2026
Last reviewed October 29, 2026 by the Accident Claim Facts editorial team. Found an error? Tell us.
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