ACV vs RCV Roof Insurance: Settlement Math and Endorsements

Quick answer

Actual Cash Value (ACV) is replacement cost minus depreciation. Replacement Cost Value (RCV) is what it actually costs to install a comparable new roof today. On a covered claim, an ACV policy pays the depreciated value once and stops. An RCV policy pays the ACV amount first, then releases a second check called recoverable depreciation after you complete the repair and submit the final invoice. The difference between the two on a 15-to-20-year-old roof is often the difference between a paid replacement and a five-figure out-of-pocket bill. Most carriers default new policies to RCV on the dwelling, but they convert older roofs to ACV at renewal under a "roof age schedule" or "roof settlement endorsement." Read your declarations page for the words "actual cash value roof loss settlement" or "roof surfacing payment schedule." If you see them, you do not have full RCV on the roof, even if the rest of the dwelling is RCV. The fix is either an endorsement upgrade at renewal or replacement on your own timeline before the next storm. To run your specific damage scenario, use our free Storm Damage Assessor and the Replacement Cost Estimator.

The homeowner scenario this matters for

A homeowner in Tulsa wakes up after an April hail event. The roof is 17 years old, three-tab asphalt, end of its useful service life by NRCA Roofing Manual standards but still passing rain. The hail event has NOAA confirmation through the NOAA Storm Events Database. The adjuster scopes a full replacement. The settlement letter arrives. Two homeowners on the same block, identical roofs, identical hail damage, identical adjusters. One gets a check for nearly the full cost of the new roof. The other gets a check for about a third of that and a sentence that reads "settlement reflects depreciated value." The first homeowner has RCV. The second has ACV. The damage, the carrier, the adjuster, and the storm are the same. Only the policy form differs.

This guide explains exactly where the gap lives, how the recoverable depreciation workflow gets you the second check, and when an endorsement upgrade is worth the premium.

The plain math

Replacement cost is what a licensed roofer charges today to remove the damaged roof, replace the underlayment, drip edge, ice-and-water shield, ventilation, flashings, and shingles to current code, and haul off the debris. Depreciation is the reduction the carrier applies for the age and condition of the materials at the moment of loss.

• RCV settlement (two checks): replacement cost minus deductible, paid in two pieces. The first check (the ACV portion) lands within a few weeks of the adjuster's report. The second check (the recoverable depreciation) lands after you complete the repair and submit proof of completion.
• ACV settlement (one check): replacement cost minus depreciation minus deductible, paid once. The depreciation does not come back. Whatever depreciation the carrier applies is the homeowner's out-of-pocket gap.

The depreciation number is not arbitrary. Most carriers apply a fixed percentage per year of useful life, capped at a maximum (commonly 70 to 80 percent). A 17-year-old three-tab roof on a 25-year material schedule has used roughly 68 percent of its life by straight-line math, which is the depreciation percentage the ACV settlement will reflect. A 7-year-old architectural roof on a 30-year schedule depreciates closer to 23 percent. Age dominates the math; condition is a tiebreaker the adjuster applies on inspection.

Why carriers offer ACV on older roofs at all

The National Association of Insurance Commissioners tracks state-by-state form filings; the relevant model documents are summarized at content.naic.org. What the filings show is that hail-belt and hurricane-belt carriers raised their roof-claim loss ratios sharply through the late 2010s. The response from underwriters was the roof age schedule or roof surfacing payment schedule: an endorsement that converts the roof from RCV to ACV at a defined age threshold (commonly 10, 15, or 20 years), often with a separate higher wind/hail deductible attached.

State departments of insurance publish the bulletins that authorize these endorsements. Florida's roof-payment-schedule rules are documented through the Florida Office of Insurance Regulation. The Texas Department of Insurance maintains consumer guides for ACV roof endorsements at tdi.texas.gov. The Oklahoma Insurance Department publishes its bulletins at oid.ok.gov. Read your state DOI's homeowner pages before assuming what your carrier filed in your state.

The carrier's logic is straightforward: a 20-year-old roof has consumed most of its useful life regardless of whether a storm finishes it off, so the carrier prices coverage for the depreciated value rather than the full replacement.

The recoverable depreciation workflow

This is the part the carrier will not walk you through unprompted. The recoverable depreciation check is conditional, and the conditions cluster predictably.

1. Read the carrier's first letter carefully. The settlement letter on an RCV policy will list "Replacement Cost Value," "Depreciation," "Actual Cash Value," and "Deductible." The first check equals ACV minus deductible. The recoverable depreciation is the holdback.
2. Sign the contract before the recoverable depreciation deadline. Most policies require the work to be completed within a window after the loss (commonly 180 days, sometimes 365). Miss the window and the depreciation forfeit is automatic. Check your declarations page or call the carrier in writing to confirm your specific window before you assume.
3. Hire a licensed contractor and document everything. Photos of the existing roof before tear-off, photos of the deck after tear-off, photos at each underlayment stage, photos of the completed roof. The carrier's depreciation release is conditioned on proof of the work being completed to the scoped specification.
4. Submit the completion package within the policy window. Final invoice on contractor letterhead. Lien waivers from the contractor. Permit close-out from the municipality if your jurisdiction requires one. Date-stamped photos. Mail it certified or upload through the carrier's portal so you have a timestamp.
5. Carrier issues the recoverable depreciation check. The check clears the carrier's audit and lands within the policy's stated period (commonly 30 to 60 days after submission, governed by state prompt-pay statutes; California's appears in the California Department of Insurance consumer pages).
6. If the work cost more than the original scope, file the supplement now. Code upgrades, deck replacement, decking that turned out to be rotten on tear-off, ventilation that did not meet current International Residential Code requirements. Supplements are normal, expected by carriers, and ride alongside the depreciation release.
7. Confirm the claim is closed and the file is correct. Ask in writing for a closed-claim letter listing the total paid amounts. This is the document that matters at your next renewal and at resale.

When to upgrade your endorsement

The endorsement to ask for at quote time and at every renewal is full RCV on the dwelling roof with no roof age schedule attached. If your declarations page shows any of the following, request a quote with the endorsement removed and compare premium:

• "Roof loss settlement: Actual Cash Value"
• "Roof surfacing payment schedule"
• "Roof age schedule"
• "Cosmetic damage exclusion" (often paired with ACV on metal roofs and gutters)

The premium difference for full RCV on a moderate-age roof is small compared with the out-of-pocket gap on a real ACV claim. Carriers that decline to write full RCV on roofs above a stated age are signaling that they view the roof as near end-of-life. That information is itself useful: if four carriers in a row decline RCV on the same roof, plan replacement on your own timeline rather than waiting for the next storm to force the issue. A new roof with documented install date, materials, wind rating, and impact rating typically re-qualifies for RCV at most carriers, often with a meaningful premium reduction.

ACV exceptions worth knowing

Three special cases come up enough to deserve mention.

• Functional replacement cost is a third settlement type, distinct from both ACV and RCV. It pays only the cost of restoring the roof's function with modern materials, not a like-for-like match. Common on older homes with wood shake, slate, or specialty tile. If your roof is one of these materials, ask the agent in writing whether your endorsement is ACV, RCV, or functional. The three pay very differently.
• Matching coverage is the contested middle ground when only one slope is damaged. Most state DOIs require carriers to address matching, but the language varies. The Illinois Department of Insurance and several Midwest DOIs have issued explicit matching bulletins. Read your state's bulletin before accepting a partial-slope scope.
• Diminution and depreciation on labor is a regional split. Some states require carriers to depreciate only materials, not labor; others allow labor depreciation. The difference can be substantial on a labor-heavy job. Your state DOI publishes the rule that applies to you.

What an RCV settlement does NOT cover

RCV is not unlimited. It will not cover:

• Upgrades above the original scope that are not required by code. New ventilation that exceeds code minimum, premium underlayment when standard underlayment was specified, a switch from architectural to designer shingles. Those are out-of-pocket.
• Code upgrades above your endorsement limit. Most policies include a separate ordinance or law coverage limit (commonly 10 to 25 percent of dwelling) that pays for current-code requirements (drip edge, ice-and-water shield in cold climates, ventilation to current IRC ratios). If the code work exceeds your endorsement, the difference is yours.
• The deductible. The deductible is always your share. On many hail and hurricane policies, the wind/hail deductible is a percentage of dwelling coverage rather than a flat dollar amount. Read your declarations page for the line item.
• Pre-existing damage the adjuster identifies. Anything visible in carrier-pulled aerial imagery from before the storm is subtracted from the scope of loss.

Common ACV-versus-RCV mistakes that cost homeowners money

• Assuming the dwelling RCV applies to the roof. It often does not. The roof endorsement is a separate clause. Read it.
• Pocketing the ACV check and not replacing the roof. You forfeit the recoverable depreciation. The carrier closes the claim, and the depreciation is gone.
• Missing the completion deadline. Most ACV-to-RCV recovery windows are 180 to 365 days. Track the date in writing.
• Signing an assignment of benefits (AOB) without reading it. AOB hands your claim payments to the contractor. Some states (Florida, for example) have restricted AOB practice through legislation tracked at floir.com; other states still allow it. AOB is appropriate for some homeowners and a coverage trap for others.
• Treating the first scope as the final scope. Code upgrades, deck replacement, and discontinued shingle matching are supplements. Carriers expect supplements. File them.

FAQ

What is the difference between ACV and RCV on a roof?

ACV is actual cash value: replacement cost minus accumulated depreciation. RCV is replacement cost value: what it actually costs to install a comparable new roof today. ACV pays once and stops. RCV pays in two checks, with the second check (recoverable depreciation) released after you complete the repair and submit the final invoice. On older roofs, the gap between the two is often the difference between a paid replacement and a five-figure out-of-pocket bill.

How do I know if my policy is ACV or RCV?

Read your declarations page. Look for the line that addresses the roof. If you see "Roof loss settlement: Actual Cash Value," "roof surfacing payment schedule," or "roof age schedule," your roof is settled at ACV regardless of whether the rest of the dwelling is RCV. If you cannot find the line, call the carrier and ask for the answer in writing. Verbal answers from a service agent are not binding.

How long do I have to claim recoverable depreciation?

The window is set by your policy, not by state law in most jurisdictions. Common windows run 180 to 365 days from the date of loss or from the date of the first settlement check. The completion package must be received by the carrier before the window closes. Some state DOIs (Florida, Texas, California) regulate the prompt-pay side, but the completion deadline itself is in your policy. Read it the day the first check arrives.

Does ACV-versus-RCV affect my deductible?

No. The deductible is a separate variable. On hail and hurricane policies, you may have a separate, higher wind/hail deductible stated as a percentage of dwelling coverage (often 1 to 5 percent). The deductible is subtracted from the loss before the ACV-versus-RCV split is applied. Read both lines on your declarations page.

Can I upgrade from ACV to RCV mid-policy?

Sometimes. Most carriers will entertain an endorsement change at the policy anniversary, not mid-term. Some will inspect the roof first and decline if the roof is above their age threshold. Ask at renewal, get the answer in writing, and request quotes from at least two other carriers before accepting an ACV-only renewal on a roof that has useful life remaining.

What if my carrier refuses to release the recoverable depreciation?

Request the refusal in writing with policy citations. Submit a rebuttal package with the contractor's documentation, the completion photos, and the final invoice. If the carrier still refuses, invoke your policy's appraisal clause (most policies have one) for a binding two-appraiser process. If appraisal fails or your policy lacks the clause, file a complaint with your state department of insurance. State-department complaints reopen a meaningful share of held-back depreciation cases because carriers respond to regulatory pressure they will not respond to from individual policyholders.

Does ACV apply to partial roof replacements?

Yes. The settlement type is set at the policy level, not the loss level. If your endorsement is ACV, every covered roof loss settles at ACV, whether the scope is one slope or the full roof. Partial replacements are also where matching disputes cluster, so document the original shingle (manufacturer, line, color) before tear-off in case the carrier scopes only the damaged slopes and a matching argument becomes necessary.

How does the recoverable depreciation check actually arrive?

After you submit the completion package (final invoice on letterhead, lien waivers, permit close-out where applicable, date-stamped photos), the carrier's claims department audits the file against the original scope. If the work matches, the depreciation release is issued by check or ACH within the policy's stated period (commonly 30 to 60 days; faster in states with prompt-pay statutes). If the work exceeds the original scope, file a supplement at the same time. Carriers expect supplements and process them alongside the depreciation release.

This guide was written by Sasha Patel, Insurance and Storm Specialist, and reviewed by a licensed roofing contractor. Last reviewed: 2026-05-12. Storm damage on a 10-plus-year-old roof? Run the Storm Damage Assessor and the Replacement Cost Estimator, then get matched with a licensed local roofer for a free inspection before you call the carrier. For policy-versus-policy basics, read our Does Insurance Cover Roof Replacement guide.