Two tiny acronyms on your homeowners policy decide whether a storm claim makes you whole or leaves you writing a five-figure check. Here's the plain-English version.
RCV — Replacement Cost Value
RCV pays what it actually costs to put a new roof on your house today, using like-kind materials. Your carrier issues the depreciated amount first, then releases the held depreciation once the work is complete and invoiced.
ACV — Actual Cash Value
ACV pays the depreciated value of your roof — what it's worth right now, accounting for age and wear. On a 15-year-old shingle roof, that depreciation can wipe out 60–70% of the replacement cost.
The math nobody shows you
- A $24,000 roof replacement on RCV: you net the full $24,000 (minus deductible).
- The same roof on ACV at 15 years: you might net $8,000.
- That $16,000 gap is what we call the 'ACV trap.'
What to do this week
Open your declarations page. Find the dwelling coverage section. If you see 'ACV' or 'Actual Cash Value' next to roof or wind/hail, call your agent today and ask what it costs to switch to RCV. Usually it's $10–$30 a month. Always worth it.