ACV vs RCV Settlement Profile

What this tool does

The ACV vs RCV calculator reads seven inputs about your roof and your policy, then predicts which settlement basis the carrier is likely to apply: actual cash value, replacement cost value with a depreciation holdback, or carrier-dependent. The output is a profile, not a quote. We do not show dollar amounts because the dollar amount is set on the declarations page and at the adjuster meeting, not by a form.

The point of the tool is to keep you from cashing the first check and walking away. Most under-paid roof claims fail at the same step: the homeowner takes the actual cash value advance, never claims the recoverable depreciation, and under-builds the roof. The next storm walks the carrier away. The checklist is built to stop that pattern.

What ACV and RCV actually mean

Actual cash value (ACV) is replacement cost minus depreciation. If a 15-year-old asphalt shingle roof has a 25-year useful life, the carrier deducts the 60 percent of life already used. You get the depreciated number, you sign a release, the claim closes. There is no recoverable depreciation. Whatever gap exists between the ACV payout and the full replacement cost is on you.

Replacement cost value (RCV) is the full cost to replace the roof at today's prices, paid in two parts. The carrier issues an ACV advance up front, then holds the recoverable depreciation in reserve until the work is complete and the paid invoices are submitted. Submit the invoices, claim the holdback, get the second check. The homeowner has to front the gap between the ACV advance and the contractor's draw schedule.

The Insurance Information Institute covers the basics. Your declarations page is the source of truth. The Loss Settlement section in the dwelling coverage block names the basis: replacement cost or actual cash value.

Why recoverable depreciation is the part homeowners miss

On an RCV claim, the carrier issues the actual cash value check first. The check is real money. It is also incomplete. The recoverable depreciation, the rest of the replacement cost, sits in reserve until you complete the work and submit paid invoices showing the full replacement was done.

The homeowner who cashes the first check, hires a cut-rate contractor for the ACV amount, and pockets nothing has done two expensive things. First, they walked away from real money the carrier owed under the policy. Second, they installed a roof that costs less than the carrier agreed to replace, which leaves the home under-protected for the next event. The next storm sets the cycle again, at a higher deductible and against a more skeptical carrier.

The recoverable depreciation deadline is also a hard date. Most carriers require the work to be complete and the paid invoices submitted within 180 to 365 days of the initial settlement, with some shorter. Miss the deadline and the holdback is forfeit. Ask the carrier in writing what the deadline is and put it on a calendar.

State quirks that change the answer

The settlement basis is contract law, not federal law, so the state matters. A few patterns recur often enough to name.

Texas. Texas Insurance Code Chapter 542A governs first-party property claims. Texas carriers run a 60-day acceptance or denial window after a complete claim is filed. The Texas Department of Insurance publishes a consumer claim guide. Hail belt cities (Dallas, San Antonio, Austin, Houston suburbs) carry roof-age endorsements on most personal lines policies past 10 to 15 years.

Florida. Florida Statute 627.70132 caps new and reopened roof claims at one year from the date of loss, with two years for supplemental claims. Florida policies often carry separate roof deductibles set at a percentage of dwelling coverage, which can dwarf the all-other-perils deductible. Matching coverage rules under Florida Statute 626.9744 give the homeowner the right to uniform appearance on the loss-side slope.

Colorado. The 2017 to 2024 hail cycle drove most Colorado carriers to file roof-age endorsements with the Division of Insurance. Roofs past 15 years in Colorado routinely fall under ACV-only settlement no matter the policy form. Confirm on the declarations page.

Oklahoma. Oklahoma is one of the highest hail-frequency states in the country. The Oklahoma Insurance Department publishes a roofing-fraud consumer guide that is worth reading before signing any contingency agreement. Storm chasers are heavily regulated post-2019 but still operational.

Arizona. A.R.S. Title 20 governs insurance in Arizona. Maricopa and Pima County carriers commonly settle tile roofs past 20 years at ACV regardless of policy form, because tile depreciation runs on a longer schedule. The Arizona Department of Insurance and Financial Institutions handles consumer complaints.

If your state is not named above, the answer routes to the state insurance department directory. The consumer-complaint page is the right starting point if the carrier's position changes during the claim.

HO-3 vs HO-5 vs HO-8: why the form on the declarations page decides

The policy form is printed on the declarations page in the upper corner. It is the most common reason a homeowner assumes RCV and gets ACV.

• HO-3 is the most common owner-occupied form. Open-perils on the dwelling, named-perils on contents. Most HO-3 policies pay RCV on the roof unless a roof-age endorsement is attached. Roof-age endorsements are common past 10 to 15 years in hail-belt states and past 20 years everywhere else.
• HO-5 is the broader form, sold often on newer or higher-value homes. Open-perils on both dwelling and contents. HO-5 policies almost always pay RCV on the roof with a depreciation holdback. The premium runs 10 to 20 percent higher than HO-3 for the broader coverage.
• HO-8 is the modified-replacement form sold on older homes where the replacement cost exceeds market value. HO-8 policies usually pay ACV on the roof by default. There is no RCV settlement, no recoverable depreciation, and no upgrade path inside the standard form.

If the declarations page does not name the form clearly, call the carrier and ask for the policy form and the loss settlement basis, in writing. Both belong in the claim file.

What to ask the adjuster, what to document, what NOT to sign

The adjuster meeting is the single most decisive hour of the claim. The right prep flips the conversation from accepting the carrier's scope to negotiating it on the same scope of work your contractor already wrote.

Ask, in writing:

• What is the loss settlement basis (RCV or ACV) on the dwelling coverage?
• Is the recoverable depreciation released on completion?
• What is the deadline for submitting paid invoices to claim the depreciation holdback?
• Are there any endorsements, riders, or roof-age conditions that change the basis on this specific claim?
• Does the policy include code-upgrade coverage, and what line items qualify?
• Does the policy include matching coverage on the loss-side slope?

Document: date-stamped photos of every damage point from the ground and from the eaves, a written contractor inspection report with a line-item scope of work, the NOAA SPC severe-weather record for your ZIP and the date of loss, and the receipts for any emergency tarp or mitigation work. The SPC severe weather archive is the carrier's first reference for whether hail or wind actually hit your address on the date you reported.

Do NOT sign: the proof-of-loss form, a general release, or a contingency agreement with the contractor, until you have read the proposed settlement, compared it line-by-line to your contractor's scope, and confirmed which depreciation is recoverable on completion. A contingency agreement assigns your insurance proceeds to the contractor and is the legal lever a storm chaser uses to lock you into the work. The National Association of Insurance Commissioners tracks roofing-claim scams as a top complaint category after every major hail or hurricane event.

Where to go from here

The widget result panel has your settlement-tier prediction and the adjuster checklist. The full ACV vs RCV guide walks the depreciation math, the supplement process, and how to read the declarations page line by line. The claim deadlines guide covers state-by-state caps so you know the window before you file. The adjuster meeting checklist is the 30-minute prep that flips the conversation in your favor.

When you are ready to scope the work, the storm damage assessor sorts urgency and the replacement match tool builds the complexity tier and contractor question list. The storm damage repair service hub is the long-form reference for how the insurance and contractor tracks fit together.

If you want a contractor who writes adjuster-ready scopes, coordinates the supplement, and walks the holdback process with you, the quick qualifier routes you to local pros in our network who handle insurance claims.