ACV vs RCV: What the Terms Mean for Your Roof Claim

ACV and RCV are two ways a homeowners policy can value a loss. In general terms, replacement cost (RCV) means the cost to repair or replace with materials of similar kind and quality, without taking off depreciation. Actual cash value (ACV) means that cost after depreciation for age and wear. Those definitions come from the National Association of Insurance Commissioners (NAIC) and the Arizona Department of Insurance and Financial Institutions (DIFI). Which one your policy uses, and how it applies to your roof, is a question for your agent or insurer. We can't answer it. What we can do is inspect your roof and document its condition.

What do ACV and RCV mean?

Here are the two terms side by side, in the words of neutral sources.

The NAIC adds that replacement cost is different from your home's market value, which includes the land and depends on the real estate market. Arizona DIFI notes that insurance policies often restrict when a claim is paid at replacement cost.

That's the whole definition. These are general terms, not a reading of your policy. Every policy has its own wording, and your policy wording is what counts.

What is depreciation?

Depreciation is the drop in value that comes with age and wear. The NAIC describes it as "age and wear and tear."

Arizona DIFI defines actual cash value as "Replacement Cost minus Depreciation."

How an insurer figures depreciation on a roof is up to the insurer and the policy. We don't estimate it, and we don't do the math for you. If you want to know how your insurer handles it, ask your agent.

How do I find out which one my policy uses?

Start with your declarations page. The NAIC says this page lists your policy number, dates, address, coverages, limits, premium and discounts. In the property coverage section, the NAIC says to "check to see if claims will be paid with replacement cost" or actual cash value.

Then:

1. Look for any endorsements. The NAIC says added or changed coverage shows up there.
2. Read the general conditions section. The NAIC says it explains what you're expected to do in case of a loss.
3. Call your agent or insurer and ask them to confirm, in plain words, how your home and roof are covered.

Why does my roof's age and condition come up?

Because the ACV definition talks about age and wear, it helps to know your roof's age and condition before you talk to your agent. That's not a prediction about your claim. It's just good to have the facts in hand.

You can learn a lot from your home's records. See our guide on how to find out how old your roof is.

Condition is where we come in. Our team inspects the roof, photographs what we find, and explains what shape it's in. On storm jobs paid by insurance, Arizona law (A.R.S. 32-1158.02) says a contractor's estimate has to list the damage found and where it is, the square footage, any areas left out and why, and whether the contractor went up on the roof. Our documentation follows that rule.

On most East Valley tile roofs, the underlayment wears out long before the tile does. Our report records the condition we find.

What should I ask my agent?

Take these questions to your call:

• Does my policy pay replacement cost or actual cash value on my home?
• Is my roof covered the same way as the rest of the house?
• Are there endorsements on my policy that change how the roof is valued?
• What is my deductible, and how is it applied? (The NAIC notes it can be a dollar amount or a percentage.)
• If my policy pays in more than one step, what do I need to send, and when?
• What is the deadline to report damage?

Write the answers down, with the date and the name of the person you spoke to.

What can All Storm do, and what can't we do?

We handle the roof. You stay in charge of your claim.

We can:

• Inspect your roof and document what we find with photos
• Explain your roof's condition in plain words
• With your permission, meet the adjuster at your home for the inspection
• At your request, send our photos and inspection reports to your insurance company
• Prepare supplements, which are updated estimates when we find damage or work that wasn't in the first one

We can't:

• Tell you whether your policy is ACV or RCV, or read your declarations page for you
• Tell you what your policy will pay
• Promise anything about your deductible
• Negotiate your claim or act as your adjuster

Arizona law says a contractor can't promise what insurance will pay, can't act as an adjuster, and can't pay or rebate your deductible on these storm repairs. Anyone paid to advise you on a claim must hold an adjuster license. If you want someone to represent you on the claim itself, you can hire a licensed public adjuster or an attorney, or contact Arizona DIFI.

Frequently asked questions

Is RCV better than ACV?

We can't advise you on that. The NAIC says that if you need help deciding which policy is best for you, contact your state's department of insurance or talk to your insurance agent or company.

Can you look at my declarations page and tell me what I have?

No. That's reading your coverage, and a roofer shouldn't do it. Your agent or insurer can explain your declarations page. We can document your roof.

Will my policy pay to replace my whole roof?

We can't tell you that. It depends on your policy, the cause of the damage and your insurer's decision. Ask your insurer or agent.

Can you meet the adjuster at my house?

Yes, with your permission. Our team meets the adjuster at your home for the inspection and points out the damage we documented. We don't negotiate your settlement or act as your adjuster.

Book an inspection with us

If a storm hit your roof in Gilbert, Mesa, Chandler, Queen Creek or Tempe, start with an inspection. You'll get photos and a clear explanation of your roof's condition to take to your agent. We also serve the rest of the Valley and as far south as Tucson.

Book an inspection with us or call (602) 806-6806. We answer 24/7. You can also read what a roofer can do after monsoon roof damage, see our tile roofing page and our Mesa roofing page.