ACV vs. RCV: The Roof Insurance Terms That Decide Your Payout
By the Peaks & Valleys field team · Updated 2026-07-07
The short answer
Actual Cash Value (ACV) pays the depreciated worth of your old roof — often far less than replacement. Replacement Cost Value (RCV) pays for a new roof, but withholds the depreciation until the work is actually completed. Check your declarations page: which one you have changes your out-of-pocket cost by thousands.
Two policies can cover the identical roof damage and pay wildly different amounts. The difference is three letters on your declarations page — ACV or RCV — and most homeowners don’t learn which they have until a claim is already underway. Here’s what each means for your wallet.
Actual Cash Value (ACV): depreciated
An ACV policy pays what your roof was worth at the moment it was damaged — its replacement cost minus depreciation for age and wear. On a 15-year-old roof, depreciation can knock 50% or more off the payout.
Example: a replacement costs $18,000. Your roof was 15 years into a 25-year life, so the carrier depreciates it ~60%. Your ACV payout is roughly $7,200 minus your deductible. You cover the rest. ACV policies are cheaper monthly for exactly this reason — the risk stays with you.
Replacement Cost Value (RCV): new for old
An RCV policy pays to replace your roof with new materials of like kind and quality — no depreciation deducted in the end. On that same $18,000 roof, you ultimately receive $18,000 minus your deductible.
But here’s the catch that trips up thousands of homeowners: RCV is paid in two checks.
- First check — the ACV portion. The carrier issues the depreciated amount up front (~$7,200 in our example).
- Second check — recoverable depreciation. The withheld depreciation (~$10,800) is released only after the work is completed and documented.
If you pocket the first check and delay or skip the work, you forfeit the second — the bigger one. We’ve seen homeowners lose five figures this way.
Why this matters for choosing a contractor
Recovering that second check requires completion paperwork the carrier will accept: final invoice, photos, and documentation matching the approved scope. A contractor who doesn’t understand the RCV process — or a “cash discount” operator who skips the paperwork — can cost you the depreciation recovery. We file the completion documents as standard, so the second check actually arrives.
Read your declarations page today
Don’t wait for a claim to find out. Your declarations page (the summary at the front of your policy) states whether roof coverage is ACV or RCV, and some policies split the difference — RCV on the structure, ACV on the roof specifically, especially for older roofs. Bring it to your free inspection and we’ll read it with you.
Two related reads: will insurance pay for your roof at all, and what a roof actually costs here — so you know what any payout is measured against.