ACV vs RCV: Which Roof Insurance Coverage Do You Have?

What Is ACV (Actual Cash Value)?

Actual Cash Value (ACV) coverage pays for the cost to replace your roof minus depreciation. Insurance companies calculate depreciation based on your roof's age, condition, and expected lifespan.

Example ACV Calculation

• Roof replacement cost: $15,000
• Roof age: 10 years
• Expected lifespan: 20 years
• Depreciation: 50% ($7,500)
• ACV payout: $7,500 (minus deductible)

What Is RCV (Replacement Cost Value)?

Replacement Cost Value (RCV) coverage pays the full cost to replace your roof with similar materials, without subtracting depreciation.

Example RCV Calculation

• Roof replacement cost: $15,000
• Depreciation: Not deducted
• RCV payout: $15,000 (minus deductible)

However, RCV policies typically pay in two stages:

• Initial payment (ACV amount)
• Recoverable depreciation (after repairs are completed)

How to Tell Which Coverage You Have

Check your declarations page for terms like:

• "ACV" or "Actual Cash Value" = ACV coverage
• "RCV", "RC", or "Replacement Cost" = RCV coverage
• "Roof Surface Payment Schedule" or "Roof Schedule" = Modified ACV based on roof age

Why This Matters for Your Claim

The difference between ACV and RCV can be substantial—often $5,000 to $10,000 or more for a typical roof replacement. Understanding your coverage type before filing a claim helps you:

• Set realistic expectations for your settlement
• Budget for out-of-pocket costs
• Decide whether to file a claim at all
• Negotiate effectively with your insurer

What If You Have ACV Coverage?

If you have ACV coverage and your roof is older, the payout may not cover full replacement. Options include:

• Paying the difference out of pocket
• Financing the gap
• Exploring roof repair vs. full replacement
• Shopping for competitive contractor bids

Key Takeaways

• ACV = Replacement cost minus depreciation
• RCV = Full replacement cost (paid in stages)
• Check your declarations page to confirm your coverage type
• The older your roof, the bigger the difference between ACV and RCV payouts