What is NOT a factor in determining actual cash value?

Actual cash value (ACV) is typically calculated using the formula: Replacement Cost minus Depreciation. This means that to determine ACV, key factors include the type and quality of the property, as these directly affect its value in the market, and the age of the property, since older items generally have more depreciation.

The replacement cost represents how much it would take to replace the item at current market prices, which is also a critical element in determining ACV, as it helps to establish what the current value of the property would be.

The insurance premium paid, however, does not affect the actual cash value of the property. It is an amount determined based on the risk factors associated with insuring the property, various underwriting guidelines, and other negotiations between the insurer and the insured. Therefore, it is not a factor in the calculation of the property's current market value or its ACV. Recognizing this distinction is important for understanding how insurance policies value claims.