What does ACV cover?
Adjusted Cash Value coverage pays a depreciated value for your property based on an estimated value that it holds after age and wear & tear have been taken into account. Most home insurance policies start out as RCV, then get changed to ACV after the home reaches a certain age (often around 10 years).
What does RCV cover?
Replacement cost value coverage pays out the full amount needed to replace/rebuild the property at today’s prices. When an RCV policy pays out, the amount should be sufficient to cover the repair or rebuild of the entire damaged property. Most new homes are covered by an RCV home insurance policy that covers the complete rebuild of the home as if it were new. Insurance providers often change these policies to be ACV coverage after a certain number of years.
What kind of roof insurance do I have right now?
Ask your local insurance agent or check the declarations page of your home insurance policy to confirm the type of roof insurance coverage you have right now. You’ll need to know this to decide if you have the right level of coverage for your home.
How is ACV depreciation calculated?
The ACV depreciation of a roof is determined by considering the age of the roof and the amount of wear and tear it has seen versus the theoretical useful lifespan of the roofing materials.
To determine the useful life of a roof, you could consult the original purchase receipts or installation documentation, commission a roofer’s report, or compare its condition to neighboring homes of similar age to get an idea of when the roof might have been installed. Equipped with the appropriate age of the roof and the type of materials used, you will be able to find the intended useful life of a roof like this one.
Example depreciation calculation for an $18,000 full roof replacement:
15-YEAR-OLD ROOF / 20 YEARS INTENDED LIFE |
x |
$18,000 COST TO REPLACE ROOF TODAY |
= |
$13,500 DEPRECIATION is subtracted from RCV, Meaning $4,500 is the ACV PAYOUT. The homeowner must provide +$13,500. |
When is the best time to change from ACV to RCV coverage?
The best time to upgrade your roof insurance to RCV is immediately after replacing your roof so you have maximum coverage for the new roof. You would need the full RCV payout to make yourself whole again if it were damaged or destroyed. You can ask your insurance agent if there is any incentive or discount offered to homeowners who have recently replaced their roofs.
How can I upgrade from ACV roof insurance to RVC?
Follow these steps to upgrade your roof insurance coverage from ACV to full replacement cost coverage.
- Request a policy review with your insurance agent before your next renewal
- Replace your roof if possible (carriers are much more likely to offer RCV on new roofs)
- Consider using improved materials such as impact-resistant shingles during replacement
- Have a professional inspection note and record the status of your new or nearly new roof
- Shop around using independent insurance brokers who work with multiple carriers for the best odds of finding the coverage you are seeking.
What is my roof insurance deductible now?
Your current roof insurance deductible should be defined in the declarations page of your insurance policy.
Confirm with your insurance agent if you don’t know how much your current deductible would cost if you needed to file a claim. You need this information to compare the potential costs of RCV coverage against your current policy.
What will my deductible be for upgraded roof insurance?
The roof insurance deductible for an RCV policy can be a flat fee of a set amount, usually $1,000 or $2,000, or it can be calculated as a percentage of the total insured property value. Percentage deductibles are the more popular option for policies written in higher risk areas today.
Percentage Deductible Example: If your home is valued at $400,000 and your wind and hail insurance deductible is written as 2% of the total insured value of the property, you would be responsible for covering the $8,000 deductible before the insurance company released their payout to cover the remainder of the repairs.
What is recoverable depreciation for roof insurance?
Recoverable depreciation is the amount spent beyond your ACV insurance payout to complete needed repairs to your property after damage by a covered peril. In many cases, you can be reimbursed for this portion of the expenses once repairs are complete and you provide proof of the work to your insurance carrier.
What is expanded replacement coverage?
Expanded Replacement Cost coverage can provide extra money for repairs if the cost for full replacement is greater than the value of your standard replacement cost home insurance policy.
What is guaranteed replacement coverage for roof insurance?
Guaranteed Replacement Cost offers the greatest amount of certainty. Regardless of what percentage or dollar amount the cost of your home repairs goes over your base policy, the GRC coverage will pay for the full cost to make your home whole following a covered disaster.
Sources:
“Roof Depreciation Life: How It Affects Your Homeowners Insurance”, SageSure, Oct. 04, 2024, https://sagesure.com/insurance-insights/roof-replacement-cost-acv/
Howard, Pat. “Replacement cost vs. actual cash value: What's the difference?”, PolicyGenius, Feb. 16, 2024, https://www.policygenius.com/homeowners-insurance/actual-cash-value-vs-replacement-cost/
Sleight, Mandy. “What is replacement cost coverage in home insurance?”, Kin Blog, Jul. 27, 2026, https://www.kin.com/blog/replacement-cost/
Gray is the Senior Content Specialist at Sola Insurance, working with the Sales and Marketing teams to provide helpful, valuable content for homeowners and agents. Gray has worked previously in finance, logistics, and advertising.
