How Do You Read a Roof Insurance Estimate? ACV, RCV, and Depreciation Explained

Here is the question we hear almost every week: “What do all these numbers on my insurance estimate mean, and what do I actually pay?”

It is a fair question. The estimate can run 10 to 20 pages, and it is written in software shorthand. Most of the confusion is not about shingles or line items. It is about how the money moves.

This guide explains the terms in plain words. We are a roofing contractor, not your insurance company and not a public adjuster. We can explain what an estimate says. Your policy and your insurance company decide what is paid.

What is RCV on a roof insurance estimate?

RCV stands for replacement cost value. It is the full cost to replace the damaged parts of your roof at today’s prices, with similar materials.

Think of it as the top line. Every other number on the estimate starts here and subtracts from it.

RCV is built from line items such as tear-off, shingles, underlayment, flashing, and vents. Each line has a quantity and a price. Sales tax is usually added on the summary page, so the line items alone may not add up to the RCV.

What is depreciation, and what is ACV?

Depreciation is the amount your insurance company takes off for the age and condition of your roof. ACV, or actual cash value, is what is left after that. The math is simple: RCV minus depreciation equals ACV.

A 12-year-old roof has used up part of its life. The estimate shows that as a dollar amount, often with the roof’s age and expected life printed next to it.

Here is where people get tangled. “ACV” gets used two ways:

• An ACV payment is the first payment on a replacement cost policy. The depreciation is held back and paid later.
• An ACV policy pays only the depreciated value. The depreciation is never paid back.

You do not have to guess which one you have. Your estimate shows it. Look at whether the depreciation is listed as recoverable or non-recoverable. We cover both below.

How does the deductible work on a roof claim?

Your deductible is the part of the loss you pay yourself. Your insurance company subtracts it from what it pays. You pay it to your contractor as part of the job.

Deductibles come in two kinds:

• Flat dollar amount. For example, $1,000 or $2,500.
• Percentage. Some policies set the wind and hail deductible as a percentage of the home’s insured value. On a home insured for $400,000, a 2% deductible is $8,000.

Your estimate lists the deductible on the summary page. If the number surprises you, call your insurance agent. Only your agent can explain your policy.

One Utah rule matters here. A residential contractor may not rebate any part of an insurance deductible to win a job (Utah Code 13-50-302). A roofer who offers to “cover” or “waive” it is breaking that law. The law also requires a written notice on any contract or estimate paid with insurance money, stating that you are personally responsible for the deductible (Utah Code 13-50-303).

If the deductible is hard to cover at once, financing is a legal way to spread it out.

What is recoverable depreciation?

Recoverable depreciation is money your insurance company holds back until the work is done. It is part of what the estimate pays. It just comes later.

The usual order looks like this:

1. Your insurance company sends the first payment. That is the ACV minus your deductible.
2. The roof gets replaced.
3. Your insurance company receives the final invoice.
4. Your insurance company releases the recoverable depreciation.

Many estimates list a deadline for finishing the work and sending the invoice. Some give a set time from the date of loss. Read the notes and fine print on your estimate, and confirm the date with your adjuster.

What is non-recoverable depreciation?

Non-recoverable depreciation is depreciation that is not paid back, even after the roof is replaced. It is a permanent subtraction. That makes it part of what you pay.

This is the number that surprises homeowners most. People often hear “you only pay your deductible.” That is true when all of the depreciation is recoverable. It is not true when some of it is non-recoverable.

Here are common places it shows up on an estimate:

• The policy pays actual cash value only, for the whole roof.
• The estimate cites a roof payment schedule based on the age of the roof.
• Certain items, such as fences, are marked as paid at actual cash value only.

Your summary page lists recoverable and non-recoverable depreciation as separate totals. On many estimates, the line items also mark them differently. Recoverable amounts appear in parentheses and non-recoverable amounts appear in angle brackets. Always check the summary page to be sure.

If your estimate shows non-recoverable depreciation and you did not expect it, ask your adjuster or your agent which part of your policy it comes from.

What does the math look like in a real example?

Here is one made-up roof, shown two ways. These numbers are an illustration only. Your estimate will have its own.

In the first column, you pay your $1,500 deductible. In the second column, you pay the deductible plus the $2,000 that is not paid back.

On an ACV policy, all $6,000 would be non-recoverable. Insurance would pay $10,500 in total, and you would pay $7,500.

Upgrades are separate. If you choose a better shingle or add something the estimate does not list, that cost is yours too.

Where do you find these numbers on your estimate?

Look for the summary page, not the line items. Most estimates have a page titled “Summary” for each type of coverage. That page is the one to trust, because it includes tax.

Insurance companies use different labels for the same thing. Here is a plain-word guide.

We say “estimated first payment” on purpose. Earlier payments, your mortgage company, and your insurance company’s own rules can change the amount on the actual check. If you have a mortgage, the check may also be made out to both you and your lender. Here is what to do when your mortgage company is on the check.

A few shorthand terms help with the line items:

• SQ means one roofing square, which is 100 square feet.
• R&R means remove and replace.
• Detach and reset means take it off and put the same one back.
• LF means linear foot. EA means each.

What should you ask your adjuster?

Good questions get you clear answers. These are worth asking:

• Is the depreciation on my estimate recoverable, non-recoverable, or some of each?
• What do you need from me to release the recoverable depreciation?
• Is there a deadline to finish the work?
• Is my deductible a flat amount or a percentage?
• Will the check include my mortgage company’s name?
• If my contractor finds something that is not listed, how should the documentation be sent to you?

Write down who you talked to and when. It saves time later.

What changes after the first estimate?

The first estimate is often not the last one. If your roofer finds an item that is not listed, documentation can be sent to your insurance company. That request is called a supplement, and your insurance company decides whether to approve it.

If it is approved, you get a revised estimate. The RCV, depreciation, and payment numbers all update. We explain supplements, and whether your roofer should work from the insurance estimate or write a separate one, in insurance estimate vs. contractor estimate. For the bigger picture, see how the roof insurance claim process works in Utah.

How does Homer Roofing help with your estimate?

We have worked with Utah homeowners on storm claims since 2003, and we are GAF Master Elite certified. When you have an estimate in hand, we sit down with you and go through it page by page. We show you what it lists, how it lines up with your roof, and what your share looks like based on the estimate.

We also show up at the adjuster meeting and bring photos and documentation of what we found.

We do not negotiate your claim. That is between you and your insurance company. If you are not sure a claim makes sense at all, start with should you file a roof insurance claim. You can also read more about how we help with insurance claims.

Key Takeaways

• RCV is the full cost to replace. ACV is RCV minus depreciation.
• The estimated first payment is usually ACV minus your deductible.
• Recoverable depreciation is paid after the work is done and invoiced.
• Non-recoverable depreciation is not paid back. It is part of what you pay.
• You always pay your deductible. A Utah roofer cannot rebate it.
• Use the summary page, not the line items, to find your totals.
• Your policy and your insurance company decide what is paid. Ask your adjuster or agent when a number is unclear.

FAQ

What is the difference between ACV and RCV on a roof insurance estimate?

RCV is the full cost to replace the damaged roof at today’s prices, and ACV is that cost minus depreciation for age and wear. On most estimates, ACV minus your deductible is the estimated first payment. Whether the depreciation is paid later depends on whether the estimate lists it as recoverable.

What does non-recoverable depreciation mean?

Non-recoverable depreciation is the part of the depreciation your insurance company does not pay back, even after the roof is replaced. It becomes part of what you pay, on top of your deductible. Your estimate’s summary page lists it on its own line.

How do I get my recoverable depreciation back?

Recoverable depreciation is released after the work is finished and your insurance company receives the final invoice. Many estimates also list a deadline for finishing the work. Read the notes on your estimate and confirm the steps with your adjuster.

Do I have to pay my deductible on a roof claim in Utah?

Yes. Your deductible is your share of the loss, and Utah Code 13-50-302 bars a residential contractor from rebating any part of it to win a job. Any contract or estimate paid with insurance money must include a written notice that you are personally responsible for the deductible.

Why is my first insurance check less than the cost of the roof?

The first payment is usually the ACV minus your deductible, not the full replacement cost. The insurance company holds back the depreciation until the work is done. If part of the depreciation is non-recoverable, that part is not paid later.

Can my roofer explain my insurance estimate to me?

Yes. A roofing contractor can walk you through what the estimate lists and how it lines up with the work on your roof. A contractor cannot tell you what your policy pays for or negotiate your claim. Those questions go to your adjuster or your insurance agent.

What is the difference between an ACV policy and an ACV payment?

An ACV payment is the first payment on a replacement cost policy, with the depreciation paid later. An ACV policy pays only the depreciated value, so the depreciation is never paid back. Your estimate shows which one you have by listing depreciation as recoverable or non-recoverable.

This article is general education. It is not legal advice and it does not review your insurance policy. Homer Roofing is a roofing contractor, not a public adjuster. Your insurance company and your policy decide what is paid. The dollar amounts above are examples only.