A basic form dwelling loses a roof section that costs $12,000 to replace and has depreciated $4,000. Before any deductible, the policy pays:

Giải thích

Actual cash value is replacement cost less depreciation: $12,000 minus $4,000 leaves $8,000, and the deductible then comes off that figure. Paying the full $12,000 would apply the broad or special form's replacement-cost settlement, and paying $4,000 hands the insured the depreciation instead of the value that was actually destroyed.