ACV vs RCV: Understanding Your Insurance and What It Means for Your Roof

by Apr 22, 2023

Insurance policies can be hard to understand at times. They include all kinds of strange wording and jargon that may be difficult to filter through. Many times, homeowners may believe they have one type of policy only to learn that isn’t accurate. One of the most important parts of your policy to understand is the difference between actual cash value vs. replacement cash value. Hopefully, you will have a better grasp of the difference after this article. 

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What is ACV?

Many refer to ACV as apple cider vinegar. That is true, but for the sake of this topic, ACV stands for Actual Cash Value. ACV is the payout for the depreciated value of your roof. In other words, the insurance company will only pay you for the value of your roof as it is today. If your roof has approximately $15,000 worth of damage, and the insurance company has determined it has depreciated $10,000, and with a common deductible of $1,000, the insurance company will write a check for $4,000. You will then need to cover the difference between the cost of a new roof or repairs and the $4,000 check. 

What is RCV?

Replacement cost value works in a different way. RCV will cover the cost of a new roof or repair the existing one, without deducting the depreciation. Let’s use this same scenario but with a homeowner who has RCV in their insurance policy. If, once again, the damage to a home is $15,000, $0 depreciation applied, with a $1,000 deductible, the insurance check will be for $14,000. That is a little easier to swallow when it comes to replacing or repairing a roof. While RCV seems like the much better option, keep in mind the premium may be more expensive considering the outcome. 

Be sure to discuss with your insurance agent the difference between the two and your particular home and policy. It is best to discuss this before you are in need of it. 

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The Process is Long

Unfortunately, the whole process does take some time. It won’t be as easy as making a phone call after the damage is noticed, and the check will be in the mail by Friday. Here are the typical steps in filing a claim: 

  • The insurance agent is contacted
  • An adjuster is notified and asked to do an inspection
  • The adjuster will review the roof, and if approved, begin to write up the claim. The adjuster is the only one who can approve the claim and continue the process. 
  • A reputable roofing contractor must be found
  • They will assist with any other supplemental needs which must be listed on the claim.
  • The supplemented claim is sent back to the insurance company for approval. There is a chance the claim could be denied by the insurance company as they review your policy and the information they are presented with. 
  • If approved, the repair or replacement can begin

The above steps may be slightly different based on the insurance company or the roofing contractor in Wichita you choose to work with. Consider speaking with Rhoden Roofing in Wichita if you are in need of a professional and thorough roofing contractor. We have assisted many homeowners with insurance claims and we can help ease any tensions you may have. 

We are here to help bring back a solid roof and peace of mind you can rely on. 

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