actual cash value

Actual cash value starts from what it would cost to replace the item today, then subtracts value lost to age and use. A sofa with an expected life of ten years, damaged in its fifth year, has consumed roughly half its useful life, so an ACV settlement lands near half the replacement price, adjusted for condition.

The arithmetic is not arbitrary and it is not a negotiating position. It is the standard indemnity principle: reimbursement puts you back where you were, holding a five-year-old sofa, rather than better off with a new one. The mechanics of the deduction are in depreciation.

The alternative basis is replacement cost value, which pays what a new equivalent costs with no deduction for age. Property insurance policies are often written on that basis, at a higher premium, and hosts who carry one sometimes assume the platform programme works the same way.

It generally does not. That difference between the two bases is the real gap in your protection, and it is the reason experienced hosts hold a policy behind the platform programme rather than instead of it. AirCover versus host insurance compares the layers.

A contractor's labour has no age. Repairing a floor, unblocking a drain, remediating an odour, replacing a lock: these are invoiced services, and they tend to survive review much closer to their face value than any physical item does.

The practical consequence is a claim strategy. Where repair is a reasonable option, claim the repair and attach the trade quote rather than asking for a replacement that will be written down. Worked examples by item type are in how much AirCover actually pays.

Three habits narrow the difference between what you lose and what you recover. Keep purchase dates and receipts for high-value items, so age is a fact rather than an assumption. Document condition at turnovers, since a well-maintained item in evidenced condition is valued better than an undocumented one. And claim repairs where repairs are genuine.

Beyond that, the gap is a business cost to price rather than a claim to win. The free Airbnb Risk Calculator turns it into an annual number for your property mix, which is the figure to weigh an insurance premium against.