The two ways carriers value your property, and why the difference is worth thousands.
The two ways carriers value your property, and why the difference is worth thousands.
Replacement cost and actual cash value get treated like synonyms. They are not.
What it costs to replace the damaged item with like kind and quality, without deducting depreciation. Labor, materials, overhead, profit, code work if the policy has it.
You usually do not get the full RCV in the first check. The carrier pays actual cash value up front, holds the depreciation, and releases it when the work is done. That holdback is not a gift. If the policy is RCV, it is part of what they owe after you rebuild.
Replacement cost minus depreciation. Age, condition, useful life. A 15-year-old roof is not paid like a new roof if the form is ACV.
ACV is also how some endorsements quietly change a policy that looks like replacement cost on the declarations page. I have read Allstate forms where a roof and siding restoration endorsement limited those items to ACV. That is not a deal breaker on its own. It will change what the homeowner actually nets, and it should be known before anyone promises a full replacement.
Ask for the full policy. Declarations pages do not show this.
Carriers like ACV on the items that cost money. They will depreciate shingles, aluminum, and HVAC as if the storm hit a landfill. The estimate then looks "fair" because the math is internally consistent and still wrong for an RCV policy.
On the other side, a real RCV claim still has a deductible and still has a depreciation holdback until the work is done. Anyone who tells you the first check is the whole claim is either confused or selling something.
1. Get the forms.
2. Find out whether roofs, siding, and other scheduled items are RCV, ACV, or ACV-by-endorsement.
3. Do not sign a release on an ACV check if the policy owes recoverable depreciation.
4. If you do not want to read 80 pages of ISO forms, send them to us.
Free claim review: (888) 720-5618.
This is not a coverage opinion on your policy. The forms in your packet control.
Scope & Price, LLC is a public adjusting firm in Maryland and Virginia. Free claim review: (888) 720-5618. Coverage and payment depend on the policy and the facts of the loss.