If you read one paragraph of your homeowners policy this year, read the Loss Settlement clause. It's usually two pages in, written in dense legal English, and it determines whether a covered roof claim pays you the full price of a new roof or a depreciated number that may not even cover the deductible. The two terms that decide this are ACV (Actual Cash Value) and RCV (Replacement Cost Value). They sound similar. They are not. On a typical Maryland or Florida roof, the gap between them can run into the thousands of dollars, sometimes more than half the cost of the replacement.
The Two-Sentence Definition
Replacement Cost Value (RCV) is what it costs today to put back what you had: same materials, same labor, current pricing, no deduction for age. Actual Cash Value (ACV) is RCV minus depreciation. Depreciation is the carrier's calculation of how much of the roof's useful life has already been used up. A 12-year-old asphalt shingle roof on a 25-year material is roughly 48% depreciated, which on a typical Maryland or Florida residential replacement scope is several thousand dollars in carrier-held depreciation if your policy pays ACV.
Illustrative Carrier Math on a Maryland Claim
Same storm, same damage, two different policies. The figures below are an industry example using a 2,400 sq ft asphalt shingle replacement scope priced to 2026 Maryland averages. They are NOT a Supreme Restorations quote. Your actual replacement scope, deductible, and depreciation depend on your specific roof, policy, and carrier. Call us at the number on this page for a free written scope on your property.
| Line item | Example amount |
|---|---|
| RCV scope (full replacement, code-current) | $18,400 |
| Age-life depreciation (48% on a 12-year-old roof) | -$8,832 |
| ACV after depreciation | $9,568 |
| Deductible (1% of $400K dwelling) | -$4,000 |
| RCV policy payout (after deductible, before recoverable depreciation) | $14,400 |
| ACV policy payout (after deductible, no recovery) | $5,568 |
| Out-of-pocket gap on ACV policy | $8,832 |
How RCV Actually Pays Out
Here's the part most homeowners miss: RCV policies don't write you a check for the full RCV up front. They cut the first check for the ACV portion (RCV minus depreciation, minus deductible). You then complete the work, send the carrier the final invoice, and they release the held-back depreciation as a second check. The held-back depreciation is called Recoverable Depreciation, and it is only paid to homeowners who actually do the work. If you take the first ACV check and pocket it without repairing the roof, the depreciation stays with the carrier. This is the design. It incentivizes restoration, not cash-out claims.
Why the Deductible Math Gets Ugly on ACV Policies
A standard percentage deductible is irritating but manageable on an RCV policy, where the eventual payout makes the project net to a few thousand out of pocket. The same deductible on an ACV policy can mean the carrier owes you nothing, because once depreciation comes off the RCV and the deductible comes off the depreciated number, the result can be at or below zero. Florida policies issued after 2022 commonly include separate hurricane and wind/hail deductibles, often 2% to 5% of dwelling value, which compounds the problem. We have walked Florida homeowners through claim files where a 5% wind deductible plus an ACV roof endorsement produced a zero-dollar payout on a real, documented hail loss. The damage was there. The policy math just didn't pencil.
Why Insurance Companies Are Pushing Roofs to ACV
Five years ago in Maryland, almost every homeowners policy was full RCV including the roof. Today a growing share of new and renewal policies in MD, FL, and VA carry an ACV endorsement specifically for roof surfacing. The reason is loss ratios. Carriers paid out more than they collected on hail and wind claims for several consecutive years, and ACV endorsements transfer the depreciation hit back to the homeowner. The endorsement language is usually buried in a separate Roof Surfacing schedule or referenced as Form HO-XXXX-RoofACV. If your policy renewed in the last 18 months, there is a real chance language was added that wasn't in your prior version. Re-read it.
Asphalt Shingle vs Metal Roof on the Depreciation Curve
Insurance companies depreciate based on the IRS-published or in-house life table for the material. Asphalt shingle is typically depreciated on a 20 to 25 year curve. Metal roofing is depreciated on a 40 to 50 year curve. That means a 12-year-old metal roof on the same house has roughly 24% depreciation versus 48% for shingle, half the hold-back. The longer life table is one of several reasons we see Maryland homeowners choosing standing-seam metal upgrades after a storm-driven replacement, especially homes in higher-risk wind zones where the carrier's depreciation schedule shows a meaningful gap.
What This Means Before, During, and After a Storm
Before a storm: read the Loss Settlement and roof endorsement language now. If you have an ACV endorsement, talk to your independent agent at the next renewal about whether RCV is available and what the premium difference is. The exact number depends on your carrier, dwelling value, and prior loss history. Your agent will quote it. During a storm: nothing changes. File when you have damage, document everything (see our 5-minute documentation guide), and let the inspection happen. After a claim is filed: read the carrier's Statement of Loss carefully. If you have RCV, confirm that the held-back depreciation is itemized as Recoverable Depreciation (not Non-Recoverable). Once the work is complete, submit the final invoice promptly to release the second check.
ACV vs RCV: Quick Answers
- Can I switch from ACV to RCV mid-policy?
- Usually not. Most carriers only allow coverage changes at renewal. Ask your agent now whether RCV roof coverage is available on your current carrier's product set and what the premium delta is at next renewal.
- What's a fair age-life depreciation schedule for asphalt shingles?
- Most carriers use a 20 to 25 year useful-life table for asphalt shingles. A 10-year-old shingle roof depreciates around 40 to 50 percent. If your carrier is using a shorter life (and therefore steeper depreciation), that's a question for your agent or a public adjuster.
- Does my deductible apply once or per slope?
- Once per claim, not per slope. One storm, one deductible, even if four slopes are damaged.
- If I have an RCV policy and don't repair the roof, what happens?
- You keep the ACV portion. The Recoverable Depreciation (the second check) stays with the carrier. RCV is structured to reimburse actual restoration spending; cash-out claims default back to ACV economics.
Storm hit your home? We'll document it.