Glossary of Insurance Terms

RCV: Replacement Cost Value – Replacement cost is the cost to replace a a roof destroyed or damaged in the event of a covered loss (hail and wind damage) by an insurance company.

ACV: Actual Cash Value – Depreciated value of roof at the time of the insurance claims assessment.

Another way to look at ACV is to consider the age of the roof. For example: If your roof is 12 years old, the ACV captures what a 12 year old roof is worth. 

DEPRECIATION: This is the difference between RCV (new market price) less the ACV (aged market price).

Depreciation is the amount of money the insurance company holds back until work is complete. Homeowner receives the ACV amount less the deductible for the first check and then receives the depreciation amount for the final check after the Contractor submits work complete in the final invoice to the insurance company.