Policy renewals for many Texas homeowners are reflecting changes in how carriers handle aging roof systems. It is essential to understand the difference between Replacement Cost Value (RCV) and Actual Cash Value (ACV) before storm season peaks.
An RCV policy typically covers the full cost of replacing a roof at today's market rates, minus the deductible, once the work is completed. The carrier holds back 'recoverable depreciation' until they receive a final invoice from the contractor.
The Impact of ACV Downsizing
Many carriers are now transitioning roofs older than 10 or 15 years to ACV-only schedules. In these cases, the depreciation is 'non-recoverable,' meaning the payout is reduced based on the age of the roof, and the homeowner must cover the difference out of pocket.
Homeowners should review their declarations page annually. Look specifically for endorsements that might limit coverage for cosmetic hail damage or schedule-based depreciation on shingles.