The short answer
With actual cash value (ACV) coverage on the roof, a claim pays the roof’s depreciated value, not the cost of a new roof. The older the roof, the less it pays. The premium may be lower, but you carry more of the cost if the roof is damaged.
Is this you?
- Your renewal says the roof will now be covered at actual cash value.
- Your policy mentions a “roof payment schedule” or a roof surfacing endorsement.
- A new insurer will cover you only with ACV on the roof.
ACV vs. replacement cost
| Replacement cost | Actual cash value (ACV) | |
|---|---|---|
| What a roof claim pays | The cost of a new roof, minus your deductible | The roof’s depreciated value, minus your deductible |
| Older roof | Still pays for a new roof | Pays less every year |
| Premium | Higher | Usually lower |
A simple example
Say a new roof would cost $20,000, your roof is 10 years old, the insurer depreciates it $1,000 a year, and your deductible is $1,000. A wind storm damages it.
- Replacement cost: the insurer pays about $19,000. You pay the $1,000 deductible.
- Actual cash value: the insurer pays about $9,000. You pay about $11,000: the deductible plus $10,000 of depreciation.
Real numbers depend on your policy, your roof, and your insurer.
Roof payment schedules
Some insurers use a payment schedule instead of calculating depreciation after a claim. The schedule lists, ahead of time, what share of the roof cost they will pay based on its age and material. Some schedules apply only to wind and hail damage, while other damage, such as fire, is still covered at replacement cost. Ask for the schedule in writing.
Questions to ask before you accept
- Could I afford the difference if the roof were damaged next year?
- Do other insurers still offer replacement cost on a roof like mine?
- Would a new roof put me back on replacement cost, and at what price?
- Does the ACV or schedule apply to all damage, or only wind and hail?
Good to know
Read every renewal notice for the words “actual cash value,” “roof surfacing,” “payment schedule,” or “endorsement.” These changes are easy to miss and can cost thousands after a storm.
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Common questions
Is ACV roof coverage bad?
Not always. It can keep you insured and lower your premium. But it shifts more of the cost of roof damage to you, and that matters most if you could not afford a big repair bill.
Can I switch back to replacement cost?
Often after the roof is replaced, or by moving to an insurer that offers it. Ask your agent what would qualify.
Does ACV affect my whole house?
Usually it applies only to the roof surface. Check your policy wording to be sure.