Policy terms
ACV vs RCV: the line that decides what a claim is worth
Two neighbours with identical houses, identical roofs and identical damage can receive very different settlements, and the reason is usually one line on the declarations page that neither of them has ever read.
How each one works
Start with the replacement cost: what it would take to replace the damaged roof today. From there the two settlement types diverge.
- Actual cash value
- The carrier depreciates the replacement cost for the age and condition of the roof, subtracts your deductible, and pays the remainder. There is no second payment. If the roof is well into its service life, the depreciation is substantial and you fund the difference.
- Replacement cost value
- The carrier pays the actual cash value first, holding back the depreciation. When the work is completed and invoiced, that held-back amount — recoverable depreciation — is released. Over the life of the claim you receive the full replacement cost less your deductible.
The practical difference is not the arithmetic, it is the second payment. Under RCV, the depreciation comes back to you only if the work is actually done and documented. Under ACV, it never comes back at all.
Why your roof might be treated differently from the rest of the house
Many policies are replacement cost on the dwelling but carry a separate settlement basis for roof surfacing. The common forms are:
- Roof surfacing ACV endorsement. The house is RCV; the roof covering is ACV regardless of age.
- Roof payment schedule. The percentage paid steps down with the age of the roof, on a table printed in the endorsement.
- Age cut-off. Full replacement cost up to a certain roof age, actual cash value beyond it.
- Cosmetic damage exclusion. Most often applied to metal roofs, where denting that does not affect function is excluded.
None of these is unusual and none of them is hidden. They are on the declarations page and in the endorsement list, and the time to read them is now rather than after a storm.
What to do with this
Find your declarations page
One or two pages, usually the first thing in the policy packet, listing coverages, limits, deductibles and endorsements by number.
Look for roof-specific wording
Search for "roof surfacing", "windstorm or hail loss to roof surfacing", "payment schedule", or "cosmetic".
Ask your agent to confirm in writing
A one-line email asking whether roof surfacing is settled on a replacement cost or actual cash value basis, and whether any schedule applies. Keep the answer.
Decide whether that is what you want
An ACV roof endorsement usually exists because it lowered the premium. That may be the right trade for you. It should be a decision rather than a discovery.
This page explains terminology. It does not tell you what your policy says, what your claim is worth, or what your carrier will decide. Those come from your own documents and your own adjuster.
Getting a roof documented is useful whichever way your policy settles.
Request a free inspectionHow is depreciation calculated?
Generally from the age of the roof against its expected service life, sometimes adjusted for observed condition. Carriers use estimating software with standard depreciation tables, which is why the figure tends to look precise even though the inputs are estimates.
Is recoverable depreciation guaranteed?
It is released when the work is completed and documented, within the time limit the policy sets. If the work is never done, it is not paid.
Can I switch from ACV to RCV?
Sometimes, at renewal, depending on the age and condition of the roof and the carrier's underwriting rules. Ask your agent. You cannot change it after a loss has occurred.
All work is performed by licensed and insured local roofing professionals.