ACV vs RCV Roof Coverage

What Is ACV vs RCV Roof Coverage?

Every roof claim is valued one of two ways. Replacement cost value (RCV) is what it costs to replace the roof with like kind and quality today. Actual cash value (ACV) is that figure minus depreciation for the roof's age and condition. Under an RCV policy, the carrier typically pays the ACV first and releases the withheld depreciation after the replacement is completed and documented — that withheld amount is the recoverable depreciation. Under an ACV policy, or an RCV policy with a roof payment schedule endorsement, the depreciation is never paid: a fifteen-year-old shingle roof may be depreciated by half or more, leaving the owner to fund the difference plus the deductible. This distinction has grown sharper as carriers in hail-prone states, including Texas, increasingly move older roofs to ACV or scheduled endorsements at renewal. Reading the declarations page for roof valuation language before storm season is the cheap version of discovering it after a loss.

Important Distinction

Note: Under an RCV policy depreciation is recoverable after the work is completed; under an ACV policy or roof-payment schedule the depreciation deduction is permanent — the policy type, not the damage, decides which.

Also Known As

These are the search terms and phrases that commonly refer to this topic, so you can find it however you describe it.