If you have an RCV policy and you’ve had a roof insurance claim, there’s a good chance you left money on the table. Here’s how recoverable depreciation works and how to collect it.
ACV vs. RCV — The Key Distinction
Actual Cash Value (ACV): The carrier pays the depreciated value of your damaged roof. A 15-year-old roof with a $14,000 replacement cost might have an ACV of $7,000 after depreciation.
Replacement Cost Value (RCV): The carrier pays what it actually costs to replace with like kind and quality. You receive ACV first, then the withheld depreciation ($7,000 in the above example) once you complete repairs. Total payout: $14,000 minus your deductible.
RCV policies cost more. They’re almost always worth it.
How Depreciation Is Calculated
Adjusters depreciate based on:
- Age: Most asphalt shingles have a useful life of 20-25 years. A 10-year-old roof is 40-50% depreciated.
- Condition: Pre-existing wear or maintenance issues increase depreciation
- Material: Some materials depreciate faster in carrier tables
The depreciation amount is stated in your claim estimate under “Withheld Depreciation.”
How to Collect Recoverable Depreciation
1. Complete the work. The carrier releases withheld depreciation only after repairs are completed.
2. Submit a completion notice. Notify your carrier in writing that repairs are complete. Attach your contractor’s final invoice and any required completion photos.
3. Submit within the deadline. Most policies require submission for recoverable depreciation within 180 days to 2 years of the initial payment. Check your policy — missing this deadline means losing the money.
4. Follow up in writing. If the carrier doesn’t release payment within 30 days, follow up and reference your policy’s timeline requirements.
Common Mistakes
Accepting an ACV check as “final settlement.” If you have RCV coverage, the ACV check is never a final settlement. Never sign a release on an RCV claim after receiving only the ACV payment.
Missing the deadline. Mark the date when you receive your ACV payment and count forward. These deadlines are real and enforced.
Not knowing your coverage type. Check your declarations page right now. Look for “Loss Settlement” — it will say ACV, RCV, or Extended Replacement Cost.
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