Understanding ACV and RCV

Dealing with storm damage to your roof can be a daunting experience. Understanding the differences between ACV (Actual Cash Value) and RCV (Replacement Cost Value) claims is essential.

ACV (Actual Cash Value)

ACV, or Actual Cash Value, is an insurance term that represents the current market value of an item, in this case, the roof, at the time of the loss. When an insurance claim is settled on an ACV basis, the insurer takes into account the age, wear and tear, and depreciation of the roof to determine its worth. The payout you receive for an ACV claim is typically lower than the cost of replacing the roof entirely.

RCV (Replacement Cost Value)

RCV, or Replacement Cost Value, is generally considered the better option when it comes to insurance claims in the roofing industry. RCV takes into account the full cost of replacing the damaged roof with a new one of similar quality and materials.

Key Differences Between ACV and RCV

1.) Coverage Amount: ACV claims offer a payout based on the current market value, including depreciation, while RCV claims cover the full cost of replacing the damaged roof.

2.) Client Responsibility: Homeowners with ACV coverage may need to cover the gap between the insurance payout and the cost of roof replacement, while RCV provides more comprehensive protection.