Florida Insurance Licensing Practice Exam

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Prepare for the Florida Insurance Licensing Exam using comprehensive questions and in-depth explanations. Perfect your understanding of essential insurance concepts and ensure your success!

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'Actual Cash Value' (ACV) means:

  1. Replacement cost at new

  2. Current cost to replace minus depreciation

  3. Original purchase price

  4. Market value

The correct answer is: Current cost to replace minus depreciation

Actual Cash Value (ACV) means the current cost to replace minus depreciation. This means that ACV takes into account the age and condition of the asset when determining its value. Option A is incorrect because replacement cost at new does not factor in depreciation. Option C is incorrect because original purchase price also does not consider depreciation. Option D is incorrect because market value may be affected by external factors such as supply and demand, rather than just the depreciation of the asset.

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