The New Hampshire Insurance Department (NHID) has released a new consumer advisory to help Granite Staters understand the differences between Actual Cash Value (ACV) and Replacement Cost Value (RCV) when selecting homeowners’ insurance coverage. The document, titled How Much Insurance Do You Need on Your Home: Understanding Actual Cash Value vs. Replacement Cost Value, is intended to support informed decision-making and ensure that homeowners are adequately protected in the event of a loss.
“Homeowners insurance is one of the most important tools Granite Staters can use to protect their most valuable asset—their home,” said Insurance Commissioner DJ Bettencourt. “Understanding how different settlement options work helps ensure that consumers are not caught off guard when disaster strikes.”
The advisory outlines the key differences between ACV and RCV settlement options. While ACV policies typically carry lower premiums, they also result in lower payouts because they account for depreciation. RCV policies, on the other hand, offer compensation based on the full cost of replacing the home, provided the insured value is at least 80 percent of the replacement cost at the time of loss.
The guidance also highlights New Hampshire’s status as a “stated value” state under RSA 407:22. In the event of a total loss due to fire or lightning, insurers are required to pay the full insured amount regardless of whether the homeowner chooses to rebuild. This provision does not apply to losses caused by other perils.
“These coverage distinctions are critical when making policy decisions,” said Deputy Insurance Commissioner Keith Nyhan. “The NHID remains committed to helping Granite Staters navigate their insurance options and make choices that reflect their needs and financial goals.”
The Department encourages homeowners to speak with their insurance agent or company to determine the best coverage for their situation. The advisory also recommends reviewing the Homeowners Insurance Shopping Tool provided by the National Association of Insurance Commissioners (NAIC), available at https://content.naic.org/sites/default/files/committees_c_trans_read_wg_related_shopping_tool_singles.pdf 
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The full consumer advisory can be viewed at https://www.insurance.nh.gov/news-and-media/blog/how-much-insurance-do-you-need-your-home-understanding-actual-cash-value-vs.
