What is the meaning of the term "actual cash value" in the standard fire policy? The middle section of the court of appeals, following a prior Tennessee case and the weight of authority, held that the phrase is synonomous with "market value" only where the goods are readily replaceable in a current market. Where there is no market, or where the market value is inadequate to properly indemnify the insured, "actual cash value" means the "'value to the owner' or the loss he suffers in being deprived of the goods." Since the goods involved in this case were personal effects, clothing and household goods, the latter standard was considered appropriate. Describing this standard as an "elastic" one, the court noted that value to the owner was to be determined by reference to "evidence of original cost, of the cost of replacement, the condition of the goods, the use to which they were being put, and all other relevant facts .... Though holding the "valued policy law" inapplicable to a policy covering personal property, the court affirmed an award of the face amount of the policy because the sole testimony of the owner sufficiently showed the value of the goods to be in excess of the policy limits.
William R. Andersen,
Insurance--1959 Tennessee Survey,
12 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vlr/vol12/iss4/16