10 September 2026 · Insurance
ACV vs RCV,
and what it pays.
Two policies can cover the same storm and pay thousands apart. The difference is one line on your declarations page and most people never read it until it matters.
10 September 2026 · Insurance
Two policies can cover the same storm and pay thousands apart. The difference is one line on your declarations page and most people never read it until it matters.
Actual cash value pays what the roof was worth on the day it was damaged, after depreciation, and stops there. Replacement cost value pays that same depreciated amount first, then releases the rest once the work is finished. Same storm, same roof, and on a fifteen year old roof the gap between them runs into thousands.
Side by side
| Actual cash value | Replacement cost value | |
|---|---|---|
| What it pays | The depreciated value of the roof | The full cost to replace it |
| Age counts against you | Yes, heavily on an older roof | Only until the work is done |
| Number of payments | Usually one | Usually two |
| Second payment | None | Released after the work is completed |
| Your share | Deductible plus all the depreciation | Deductible |
| Premium | Lower | Higher |
The part that surprises people
On a replacement cost policy the carrier holds part of the money back. That held back portion is called recoverable depreciation, and it is released after the roof is finished and the invoice is submitted. It is your money and it was always your money, but you do not see it until the job is done.
This is why a replacement cost claim seems to underpay at first. The first payment is the depreciated value minus the deductible, which on an older roof can look like half of what the job costs. The rest arrives on completion.
It also means a homeowner who takes the first payment and does not do the work forfeits the rest. Carriers are consistent about this. The second payment is tied to the roof being replaced.
Where to look
Straight answers
On a replacement cost policy that is usually the first of two payments, not the whole thing.
Compare the paperwork against the estimate line by line. If depreciation is listed as recoverable, the balance comes after the work. If the policy is actual cash value, that first payment is the whole payment.
It is cheaper, and on a new roof the gap is small. On an old roof it can leave you well short.
Depreciation is calculated against the roof's expected life. A three year old roof has lost little. A twenty year old roof has lost most of it, which is when people find out what they bought.
A request to the carrier to cover something the original estimate missed.
Adjusters write estimates from what they can see on one visit. Rotten decking under old shingles turns up during the tear-off, and a supplement is the mechanism for that. It is normal and it is documented with photographs.
No, once.
It is taken out of the first payment. The recoverable depreciation released later is not reduced again.
General information, not a reading of your policy. Wording varies between carriers and endorsements change what the base policy says. Your declarations page and your agent are the authority on your own cover.
Free inspection and a written scope that lines up against what the carrier put on paper.