ACV vs Replacement Cost: how does it affect a roof claim?
By Best Roofing Answers · Published May 2026 · Updated July 2026
Replacement Cost Value (RCV) policies pay what it costs to install a new roof today, while Actual Cash Value (ACV) policies pay RCV minus depreciation — meaning ACV on a 20-year-old asphalt roof often pays only 20–40% of the replacement cost, with the homeowner covering the rest.
How the depreciation math works
Per III guidance, most insurers depreciate a 30-year asphalt shingle roof on a straight-line basis: a 20-year-old roof carries ~67% depreciation, so an $18,000 replacement pays roughly $6,000 ACV before deductible. RCV policies pay the full $18,000 (minus deductible), often in two installments — the ACV portion up front and the depreciation released when the work is completed.
Many carriers in hail-prone states have moved older roofs to ACV-only automatically at renewal. Ask your agent whether your roof is on RCV or ACV, and whether you have a 'roof surfacing settlement' endorsement.
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