ACV vs RCV: What Your Roof Policy Actually Pays

Short answer: Actual cash value pays what your roof was worth at the moment it was damaged — replacement cost minus depreciation for age and wear. Replacement cost value pays what it costs to replace it, usually in two payments, with the depreciation released once the work is completed. On an older roof the difference is very large.

Not legal advice, not a coverage determination. United Developers is a licensed roofing and general contractor. We are not a public adjuster, not an insurance agent, and not a law firm, and adjusting or negotiating a claim on a homeowner's behalf is a separately licensed activity that we do not perform. Nothing on this page decides whether your loss is covered. Coverage depends on your specific policy, its endorsements and exclusions, the cause of loss, and your carrier's own determination. Read your policy, talk to your carrier, and consult a licensed professional about your particular situation. What we do is document the physical condition of your roof accurately and scope the repair honestly.

The two settlements, in plain language

Actual cash value

Replacement cost value

RCV pays what it costs to replace the roof, but almost never all at once. The usual structure is two payments: an initial payment of the actual cash value, and then the withheld amount — the recoverable depreciation — released after the work is completed and documented. Your deductible comes out along the way.

Why the two-payment structure matters practically

It means the first cheque you receive is not the total the carrier is going to pay, and it is not what the job costs. Homeowners who do not understand this see a small first payment and conclude the claim was underpaid, or worse, decide to pocket it and not do the work — which forfeits the recoverable depreciation and leaves them with a damaged roof and a claim on their record.

It also means the sequencing has to work. The work has to be done and documented before the second payment is released, so your contract and payment schedule with your contractor need to survive that gap. This is a normal thing that competent contractors handle routinely, and it is a conversation to have before signing rather than after.

How to find out which one you have

Look at your declarations page for the dwelling coverage and read the wording on roof surfacing specifically. Some policies are RCV for the dwelling generally but carry an ACV endorsement, a roof surfacing schedule, or a payment schedule that applies only to the roof and only past a certain age. That endorsement is easy to miss and it is the whole ballgame. If the wording is not clear, ask your agent to tell you in writing.

The other lines worth reading at the same time

Your wind and hail deductible, which is frequently separate from and much larger than your standard deductible, and is often expressed as a percentage of the dwelling coverage rather than a flat amount.
Ordinance or law coverage, which addresses the extra cost of bringing work up to current code requirements. Without it, code-required upgrades discovered during the work may not be covered.
Cosmetic damage exclusions, which appear on some policies and matter enormously for metal roofing and for dented aluminium siding.
Matching provisions, which govern what happens when damaged material cannot be matched to what is undamaged. This is central to aluminium siding claims and relevant to roofing on attached houses.

What this means when you are choosing a contractor

A contractor who understands the settlement structure will scope the job completely, document it properly and sequence the payments around how the carrier actually releases funds. A contractor who offers to make your deductible disappear is offering to misrepresent something to your insurer on a policy with your name on it. Those are not two styles of doing business. One of them is a problem you inherit.

ACV vs RCV: What Your Roof Policy Actually Pays — common questions

Which is better, ACV or RCV?

RCV protects you far better on a roof, and it costs more in premium. Whether the difference is worth it depends on the age of your roof, your exposure to wind and hail, and what you could absorb out of pocket. It is worth an explicit conversation with your agent rather than a default.

Can I keep the first cheque and not do the work?

You would generally forfeit the recoverable depreciation, and you would still have a damaged roof, a claim on your record, and a possible problem at your next renewal or sale. If the roof is damaged enough to claim, it is damaged enough to fix.

Does the depreciation come back if I do the work later?

Policies usually set a window for completing the work and claiming the recoverable depreciation. Read yours or ask the carrier, and do not assume it is open-ended.

Why is my hail deductible so much bigger?

Percentage-based wind and hail deductibles are common in areas with meaningful storm exposure, and they are a way of keeping the premium down. It is entirely legitimate and it is also the reason a claim you assumed was worth filing sometimes is not.

Get the damage documented, free

Whatever you decide to do about a claim, the useful first step is knowing what is physically on your roof. Our inspection and dated photo report are free and the report is yours to keep whether or not you hire us — hand it to your carrier, to another contractor, or to nobody at all. We inspect across Montgomery, Prince George's, Howard, Anne Arundel, Frederick and Baltimore counties and Baltimore City in Maryland.