replacement cost vs actual cash value.

in the states where Riza is licensed.

Riza is a licensed insurance agency in New York, Colorado, Texas, Florida, Massachusetts, Arizona, Nevada, North Carolina, New Jersey and Georgia. Notes below cite the law they come from. Detailed write-ups cover Arizona, Nevada, Texas, North Carolina and New York. One-line notes for other licensed states appear with them when this term has one.

• ArizonaThe Arizona Supreme Court has held that, under a policy that doesn’t define actual cash value, an insurer can’t depreciate labor when it calculates actual cash value. Arizona has no statutory definition beyond its standard fire policy and no rule on how long you have to rebuild to collect the holdback.Walker v. Auto-Owners Ins. Co. (Ariz. 2022) · A.R.S. § 20-1503contractors in Arizona →
• NevadaNevada has no statute defining actual cash value for property claims and no ruling on depreciating labor that we found, so the policy wording controls. There’s also no state rule on the holdback period.NRS ch. 691Acontractors in Nevada →
• TexasWhether Texas insurers can depreciate labor is unsettled: federal courts applying Texas law have gone both ways, most recently against it. A state insurance department bulletin defines actual cash value and bars deducting contractor overhead, profit and sales tax, but doesn’t address labor.TDI Bulletin B-0045-98 · Sims v. Allstate Fire & Cas. Ins. Co. (W.D. Tex. 2025)contractors in Texas →
• North CarolinaThe North Carolina Supreme Court has held that insurers may depreciate labor when calculating actual cash value under the policy it reviewed. We found no later law changing that and no state rule on the holdback period.Accardi v. Hartford Underwriters Ins. Co. (N.C. 2020)contractors in North Carolina →
• New YorkNew York defines actual cash value through its standard fire policy and claims regulation, and the state insurance department has said replacement cost isn’t defined by law, so the policy governs. We found no ruling on depreciating labor.N.Y. Ins. Law § 3404 · NY DFS OGC Opinion 08-10-12contractors in New York →
• ColoradoColorado has no appellate ruling on labor depreciation; a federal trial court allowed it under a policy defining ACV as repair cost less depreciation, and state law sets minimum windows to collect held-back depreciation after total and wildfire losses.C.R.S. 10-4-110.8, homeowners insurance requirements · [secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• FloridaFlorida courts have generally allowed depreciation of labor and of overhead and profit in actual cash value, based on available surveys, and a state statute requires insurers to pay at least actual cash value first on replacement cost dwelling claims.Fla. Stat. 627.7011, homeowners replacement cost · [secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• GeorgiaGeorgia has no labor depreciation ruling, statute or bulletin that we found; based on available surveys, its courts treat actual cash value as fair market value at the time of loss.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• MassachusettsMassachusetts has no labor depreciation ruling or rule that we found; based on available surveys, its courts measure actual cash value under the broad evidence rule, which weighs any evidence relevant to value.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• New JerseyNew Jersey has no labor depreciation ruling or rule that we found; based on available surveys, its courts measure actual cash value under the broad evidence rule, which weighs any evidence relevant to value.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)

every other state.

How it works everywhere else, with the rule each line comes from. Riza is not licensed in these states.

• AlabamaAlabama has no appellate ruling on labor depreciation that we found; based on available surveys, federal trial courts split, allowing it where the policy defined ACV as replacement cost less depreciation and refusing it where ACV was undefined.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023) · [secondary] Horst Krekstein & Runyon survey of state law on labor depreciation (updated 8/28/2025)
• AlaskaAlaska’s Division of Insurance barred labor depreciation in ACV definitions by bulletin in May 2024, then withdrew that bulletin effective January 2025, and we found no court ruling, so the question is unsettled.Alaska Division of Insurance Bulletin B 24-07 (withdrawn) · Alaska Division of Insurance bulletins index (B 25-03 withdrawal) · [secondary] Horst Krekstein & Runyon survey of state law on labor depreciation (updated 8/28/2025)
• ArkansasArkansas has allowed labor depreciation by statute since August 2017 if the policy carries Commissioner-approved notice language and the insurer explains the calculation in writing, reversing a 2015 state Supreme Court ruling against it.Ark. Code Ann. 23-88-106 (2017), expense depreciation · Shelter Mutual Ins. Co. v. Goodner, Ark. Supreme Court (2015)
• CaliforniaCalifornia’s claims regulation says labor is not a component of physical depreciation, its statute sets how ACV is measured, and policyholders get at least 12 months (36 after a declared emergency) to collect held-back replacement cost.Cal. Code Regs. tit. 10, 2695.9 (labor not subject to depreciation) · Cal. Ins. Code 2051, measure of ACV recovery · Cal. Ins. Code 2051.5, replacement cost time limits
• ConnecticutConnecticut’s standard fire policy statute defines ACV as repair or replacement cost minus depreciation, which it ties to wear and tear, but we found no court ruling on whether labor can be depreciated.Conn. Gen. Stat. 38a-307, standard fire policy (chapter 700) · [secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• DelawareDelaware has no statute, regulation or reported decision on labor depreciation that we found, and based on available surveys, its courts treat actual cash value as fair market value.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• District of ColumbiaThe District of Columbia’s insurance regulator said in an August 2025 bulletin that depreciating labor, taxes, fees, or overhead and profit in ACV is an unfair claims practice, and it won’t approve forms that allow it.DISB Bulletin 25-IB-001-08/12, labor depreciation
• HawaiiHawaii has no labor depreciation ruling or rule that we found, and the status of a 2026 bill giving policyholders at least 36 months after a declared disaster to collect replacement cost is unclear.Hawaii SB 2960 SD1 (2026), extended replacement cost recovery (bill) · [secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• IdahoIdaho has no labor depreciation ruling or rule that we found; based on available surveys, its courts measure actual cash value under the broad evidence rule, which weighs any evidence relevant to value.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• IllinoisIllinois’s Supreme Court held in 2021 that when a policy doesn’t define ACV or depreciation, only materials, not labor, can be depreciated; a policy expressly depreciating labor wasn’t before the court.Sproull v. State Farm Fire & Cas. Co., 2021 IL 126446 · 50 Ill. Adm. Code 919.80, required claim practices
• IndianaIndiana’s Supreme Court approved an across-the-board depreciation deduction in 1982, which some read as allowing labor depreciation, but based on available surveys, commentators disagree on whether it settles the question.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023) · [secondary] Horst Krekstein & Runyon survey of state law on labor depreciation (updated 8/28/2025)
• IowaIowa has no labor depreciation ruling or rule that we found; based on available surveys, its courts measure actual cash value under the broad evidence rule, which weighs any evidence relevant to value.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• KansasKansas has no appellate ruling that we found, but based on available surveys, a federal court applying Kansas law allowed labor depreciation where the policy provided for depreciation, and the federal appeals court affirmed in 2017.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023) · [secondary] Horst Krekstein & Runyon survey of state law on labor depreciation (updated 8/28/2025)
• KentuckyKentucky’s claims regulation allows labor depreciation only if the policy provides for it, and where a policy is silent, a 2020 federal appeals ruling held labor cannot be depreciated under the state’s ACV formula.806 KAR 12:095, unfair claims settlement practices · Hicks v. State Farm Fire & Cas. Co., 6th Cir. (2020)
• LouisianaLouisiana courts have allowed labor depreciation in ACV, based on available surveys, and the state reportedly extends repair windows after declared disasters, though we did not verify the statute text.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023) · [secondary] Horst Krekstein & Runyon survey of state law on labor depreciation (updated 8/28/2025)
• MaineMaine has no labor depreciation ruling or rule that we found; based on available surveys, state law treats actual cash value as replacement cost less depreciation, though we did not verify the statute text.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• MarylandMaryland’s insurance regulator proposed a 2025 bulletin saying labor may not be depreciated in ACV settlements, but we could not confirm it was finalized, and a 2026 bill to codify the ban showed no action past committee.Maryland Insurance Administration proposed bulletin on depreciation of labor (April 2025) · Maryland HB 283 (2026), property insurance settlement of claims
• MichiganMichigan’s regulator says homeowners and dwelling policies issued or renewed from July 2025 may depreciate labor, taxes, fees, and overhead and profit only through an optional endorsement offered for a lower premium; commercial policies fall outside the bulletin.Michigan DIFS Bulletin 2024-26-INS, depreciation of nontangible items
• MinnesotaMinnesota’s Supreme Court held in 2016 that when a policy doesn’t say how ACV is calculated, embedded labor depreciation may be considered if it helps establish value, which makes it a case-by-case question.Wilcox v. State Farm Fire & Cas. Co., Minn. Supreme Court (2016) · Minn. Stat. 65A.10, replacement cost coverage
• MississippiMississippi’s insurance department says no statute bars labor depreciation if the policy clearly provides for it, while a 2020 federal appeals ruling held labor can’t be depreciated where the policy leaves ACV undefined.Mitchell v. State Farm Fire & Cas. Co., 5th Cir. (2020) · Mississippi Insurance Department bulletins index (Bulletin 2017-8) · [secondary] Horst Krekstein & Runyon survey of state law on labor depreciation (updated 8/28/2025)
• MissouriMissouri’s Court of Appeals held in 2022 that labor can’t be depreciated under a policy that doesn’t define ACV or depreciation to include it, so the outcome turns on policy wording.Franklin v. Lexington Ins. Co., Mo. Ct. App. (2022) · [secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• MontanaMontana’s measure of indemnity statute, along with a Commissioner advisory memorandum that available surveys describe but we didn’t locate, is read to bar labor depreciation unless the policy states a valuation.Mont. Code Ann. 33-24-101, measure of the indemnity · [secondary] Horst Krekstein & Runyon survey of state law on labor depreciation (updated 8/28/2025)
• NebraskaNebraska’s Supreme Court held in 2017 that insurers may depreciate labor when calculating actual cash value, even where the policy doesn’t define ACV or depreciation.Henn v. American Family Mut. Ins. Co., Neb. Supreme Court (2017)
• New HampshireNew Hampshire has no labor depreciation ruling or rule that we found; based on available surveys, its courts take a flexible broad evidence approach to measuring actual cash value.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• New MexicoNew Mexico has no labor depreciation ruling or rule that we found; based on available surveys, its courts treat actual cash value as fair market value.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• North DakotaNorth Dakota has no labor depreciation ruling or rule that we found; based on available surveys, its courts treat actual cash value as fair market value.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• OhioOhio’s Supreme Court hasn’t decided the question, but a federal appeals court applying Ohio law held in 2020 that labor can’t be depreciated where the policy doesn’t clearly provide for it.Perry v. Allstate Indem. Co., 6th Cir. (2020) · [secondary] Horst Krekstein & Runyon survey of state law on labor depreciation (updated 8/28/2025)
• OklahomaOklahoma’s Supreme Court held in 2002 that a roof is a single product of materials and labor and may be depreciated as a whole under the broad evidence rule.Redcorn v. State Farm Fire & Cas. Co., 2002 OK 15
• OregonOregon has no labor depreciation ruling or rule that we found, but a 2021 law gives at least 24 months after the first ACV payment, extendable to 36, to rebuild a primary home lost in a declared emergency.Oregon HB 3272 (2021), enrolled · [secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• PennsylvaniaPennsylvania’s Superior Court, based on available surveys, has allowed labor depreciation where the policy authorizes depreciation and defines ACV as repair or replacement cost less physical deterioration.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023) · [secondary] Horst Krekstein & Runyon survey of state law on labor depreciation (updated 8/28/2025)
• Rhode IslandRhode Island has no labor depreciation ruling or rule that we found; based on available surveys, its courts measure actual cash value under the broad evidence rule, which weighs any evidence relevant to value.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• South CarolinaSouth Carolina’s Supreme Court held in 2021 that insurers may depreciate embedded labor when calculating actual cash value, even where the policy doesn’t define ACV.Butler v. Travelers Home & Marine Ins. Co., S.C. Supreme Court (2021), Op. 28026
• South DakotaSouth Dakota has no labor depreciation ruling or rule that we found; based on available surveys, its courts measure actual cash value under the broad evidence rule, which weighs any evidence relevant to value.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• TennesseeTennessee’s Supreme Court held in 2019 that labor can’t be depreciated when ACV is calculated as replacement cost less depreciation under the policy language before it, and we found no later statute changing that.Lammert v. Auto-Owners (Mutual) Ins. Co., Tenn. Supreme Court (2019)
• UtahUtah has no labor depreciation ruling or rule that we found; based on available surveys, the state insurance department’s consumer glossary describes actual cash value as replacement cost less depreciation.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• VermontVermont’s insurance regulator said in a bulletin effective May 2015 that depreciating labor as a business practice is an unfair claim settlement practice under state law.Vermont DFR Insurance Bulletin 184 (2015, scanned PDF) · [secondary] Horst Krekstein & Runyon survey of state law on labor depreciation (updated 8/28/2025)
• VirginiaVirginia’s Bureau of Insurance, per reports of an October 2025 administrative letter we didn’t read directly, treats depreciating labor, taxes, fees and overhead in ACV settlements as an unfair claims settlement practice.Virginia SCC Bureau of Insurance administrative letters index · [secondary] AAIS compliance alert on Virginia labor depreciation letter
• WashingtonWashington bars labor depreciation by regulation, which says labor to repair, rebuild or replace property, other than labor built into manufactured materials, isn’t part of physical depreciation; the rule was last amended in December 2025.WAC 284-20-010
• West VirginiaWest Virginia has no labor depreciation ruling or rule that we found; based on available surveys, the Insurance Commissioner’s consumer guidance describes actual cash value as the depreciated cost to repair or replace.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• WisconsinWisconsin has no labor depreciation ruling or rule that we found; based on available surveys, its courts use replacement cost less depreciation, or the broad evidence rule when the policy is silent.[secondary] Matthiesen, Wickert & Lehrer 50-state chart on RCV, ACV, holdbacks and labor depreciation (updated 3/22/2023)
• WyomingWyoming has no statute, regulation, bulletin or court decision on ACV or labor depreciation that we found, and available surveys list no entry for the state.[secondary] Horst Krekstein & Runyon survey of state law on labor depreciation (updated 8/28/2025)

by trade.

• General contractorsOlder shop buildings and equipment are where actual cash value settlements fall short of the cost to replace.
• RoofingRoof age schedules that switch to actual cash value matter for your own buildings and your customers’ claims.
• PlumbingSpecialized equipment valued at actual cash value may not replace a working tool after a theft.

where you’ll see it.

• Property declarations“Valuation: replacement cost” or “actual cash value” next to each limit.
• Claim estimatesLine items showing replacement cost, depreciation and actual cash value.
• Roof schedulesAn endorsement that values roofs over a certain age at actual cash value.

related terms.

Coverage it touches: Commercial property · Tools and equipment