Depreciation

ACV vs. RCV, in Plain English

Actual cash value (ACV) and replacement cost value (RCV) are the two ways a policy can pay for the same roof — the one setting that decides whether a storm costs you your deductible or most of a new roof. With the arithmetic.

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The Core Difference

ACV Vs RCV On A Roof Insurance Claim: Actual Cash Value, Replacement Cost Value, And Why The Check Is Small

ACV is actual cash value: what your roof was worth the day the hail hit, after depreciation for its age. RCV is replacement cost value: what a new roof costs today. A replacement-cost policy pays RCV in two checks — ACV less your deductible first, the withheld depreciation once the roof is invoiced. An ACV policy pays only the first.

It is worth knowing this week rather than after a storm, because it is a coverage you can usually change at renewal. Here is the difference in real figures.

Worked Example

A Worked Example With Real Numbers: The Same Roof, Two Policies

The replacement cost figure is the regional industry benchmark. The depreciation rate and the deductible are assumptions chosen to be typical, not a statement about any insurer — your declarations page has your own. The shape of the result does not change with the numbers: on an ACV-only policy the difference between the two right-hand columns is yours to find.

Illustration: a $29,253 replacement, a 15-year-old roof on a 25-year life depreciated at 60%, a flat $2,000 deductible
Line	Replacement cost policy	Actual cash value policy
Cost to replace the roof today	$29,253	$29,253
Depreciation withheld (60%)	$17,552	$17,552
Actual cash value	$11,701	$11,701
Less your deductible	−$2,000	−$2,000
First check	$9,701	$9,701
Depreciation released when the roof is invoiced	$17,552	—
Insurer pays in total	$27,253	$9,701
You pay	$2,000	$19,552

Source: Roof cost from the 2025 Cost vs. Value Report, East North Central, asphalt shingles; depreciation and deductible are illustrative assumptions

Sequence

How An RCV Claim Pays Out

First check: ACV less deductible

The insurer pays the depreciated value up front, minus your deductible — $9,701 in the example. This is normal and is not the whole settlement, though it is the point at which people assume they have been short-changed.

You have the work done

The roof is replaced and we invoice the full agreed scope. Under Wis. Admin. Code § ATCP 110.05 that contract is in writing with the materials named by make and grade, so the invoice and the scope match.

Second check: the holdback

You submit the final invoice and the insurer releases the withheld depreciation — $17,552 in the example. It has to be claimed, with the invoice, within the period your policy states. This is the single most common way homeowners leave money on the table.

Net cost to you: the deductible

On a replacement-cost claim settled properly, what you pay is your deductible plus anything you chose to upgrade. And when a payment is due, Wis. Stat. § 628.46 makes it overdue after 30 days, at 7.5 percent simple interest.

The Second Check

How Recoverable Depreciation Gets Released, And When It Does Not

Recoverable depreciation is released against a final invoice, inside the period your policy sets — often a year or two from the date of loss, and it varies. If you never send the invoice, the insurer keeps it. We provide the invoice in the form insurers ask for and remind you to send it; if you had the work done and never received a second check, call your carrier, because it may simply never have been claimed.

The other way it goes short is the scope. An adjuster’s estimate that reinstates the roof without the valley metal, the chimney cricket or the ice barrier the state code requires is short, and a supplement is how it gets corrected — a section number and a photograph, not an argument. The adjuster meeting is where that is settled fastest, and the replacement page lists every item the code requires so you can read a scope against it.

Straight Answers

Depreciation Questions

Your declarations page, under dwelling coverage — and look specifically for a roof schedule or a “roof surfaces payment schedule” endorsement, because some policies carry replacement cost on the house and actual cash value on the roof alone, stepped down by age. If you cannot tell in two minutes, call your agent and ask them to say it plainly: “If hail took my roof tomorrow, do I get replacement cost or depreciated value?”

Usually at renewal, for more premium, and generally only while the roof is young enough and in good enough condition to qualify — carriers will not write replacement cost on a roof they expect to replace. The premium difference is normally small against a five-figure depreciation holdback: in the example above it is the difference between paying $2,000 and paying $19,552. Price it.

Not the total, if the policy is genuinely replacement cost — that is the point of it. Age sets the size of the first check and therefore how much is held back until the roof is on, not what you end up with. On an actual cash value policy, age reduces everything, and the older the roof the wider the gap.

Where the adjuster’s estimate covers a shingle no longer made, or omits components the state code requires — drip edge, the ice barrier, valley metal, ridge vent. Those are supplement conversations, and they are routine: we photograph the item, cite the section of SPS 321.28 behind it, and the insurer reviews it on paper.

That the balance arrives in two parts, and a payment plan across the job is a normal way to bridge them. What is not normal is a contractor offering to absorb the deductible to close the gap — the deductible page explains why that is a forfeiture on them and a problem for you. Financing sets out the honest options.

Insurance claims

The hub: what a contractor may and may not do in a claim, the sequence, and the six pages that go deeper.

All claims pages

The questions we get asked

Cost, timing, permits, insurance and warranties, answered plainly on one page.

Roofing FAQ

The adjuster visit

Where the scope that decides your first check gets written, and why we are on the roof for it.

Adjuster meetings

Roof replacement

What the settlement is paying for: the tear-off, the code items and the independent cost benchmark.

Replacement

This page explains how Wisconsin law and a typical homeowner policy treat a roof claim. It is general information, not legal advice, and your own policy is the document that governs your claim. Where we quote a statute we link it so you can read it yourself.

Second Opinion

Holding A Check That Looks Small?

Send us the adjuster’s estimate. We will read it against the roof and tell you what is missing, what is held back, and what comes next.

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