If your roof has storm damage and you are thinking about filing an insurance claim, the very first thing you need to do is check your policy. Specifically, you need to find out whether you have an Actual Cash Value policy or a Replacement Cost Value policy. The difference between these two is enormous, and most homeowners have no idea which one they have until they need it.
Actual Cash Value (ACV)
An ACV policy pays you the depreciated value of your roof at the time of the claim. In plain terms, that means insurance looks at how old your roof is, calculates how much value it has lost since it was installed, and writes you a check for that amount.
Here is a real-world example. Say your roof was installed 12 years ago for $12,000. With an ACV policy, the insurance company calculates that your roof has depreciated to about $6,000 in current value. That is all they pay you. But a new roof today might cost $18,000 or more. You are covering that $12,000 difference out of your own pocket, plus your deductible.
"An ACV policy is a tough spot to be in. The only way a roofer can do the job for that amount is by cutting corners. And that roof is not going to last."
An ACV policy is a tough spot to be in. Some homeowners start looking for a roofer who will do the job for whatever amount the ACV check covers. But the only way to make that math work is by using the cheapest materials and labor available. That roof is not going to last, and you will be doing this again in eight to ten years.
Replacement Cost Value (RCV)
An RCV policy is designed to give you enough money to replace your damaged roof with a brand new version of itself. It works in two payments.
When your claim is approved, you get a first check for the actual cash value, just like an ACV policy. But the insurance company holds back the rest, called the recoverable depreciation. After your roof is replaced and you provide proof that the work was done according to the claim, insurance sends a second check that covers most or all of the remaining cost.
So in that same example, you would get the $6,000 check first. After your roofer completes the job and submits documentation, insurance sends another check to cover the remaining cost. Your out-of-pocket expense is your deductible plus any difference if the scope of work exceeds what insurance approved.
Why this matters so much
The difference between ACV and RCV can be tens of thousands of dollars in a roof replacement. An RCV policy is significantly better for the homeowner. If you are shopping for homeowner's insurance or renewing your policy, this is the single most important thing to check as it relates to your roof.
If you already have an ACV policy and your roof gets damaged, you still have options. You can pay the difference out of pocket. You can finance the balance. But you should go into it with clear eyes about what that policy actually covers.
One critical rule: pay your deductible
No matter which policy you have, you are responsible for your deductible. Period. If any roofing company offers to pay your deductible or waive it, walk away. That is insurance fraud in Utah. It does not matter how they frame it or what they call it.
Read more about why this matters in our article on storm chasers. But it is worth repeating here. Never let a roofer pay your deductible.
Not sure which policy you have? Check your homeowner's insurance paperwork or call your agent. If you have questions about how your policy affects your roof replacement options, we are happy to help you think through it. Contact us anytime.
"Bob helped us by walking through the steps we needed to take. He helped us with our insurance claim. He was informative and friendly. Our new roof will help us stay dry this winter."M Kafton , Google Review