How is an actual cash value roof claim paid?
Short answer. On an actual cash value roof claim, the insurer pays the cost to replace the roof minus depreciation for its age and condition, minus your deductible, and that depreciation is not paid later. The older the roof, the bigger the share you cover yourself. You can challenge the depreciation if the age or condition used is wrong.
The math on a typical ACV roof
Say the insurer prices your replacement at $16,000. The roof is 12 years old, and the adjuster applies 50 percent depreciation, so the actual cash value is $8,000. Subtract a $2,000 deductible and the payment is $6,000. Your share of a $16,000 roof is $10,000.
On a replacement cost policy, the same claim would pay $6,000 first and release the $8,000 of depreciation after the work is done, for $14,000 in total. On an ACV policy, that second payment does not exist. See ACV vs RCV and recoverable depreciation.
How depreciation is set
- Age against expected life. Adjusters often divide the roof's age by an expected life for the material and apply that percentage to the materials, and sometimes the labor.
- Condition. Some adjust for visible wear, granule loss or prior repairs.
- Which items. Whether labor is depreciated depends on the policy language and the insurer's practice.
Ways to push back
- Prove the age with an invoice, permit or closing records if the adjuster guessed older.
- Ask for the depreciation percentage and method in writing for each line.
- Show condition with dated photos if the roof was in good shape before the storm.
- Ask what policy language allows depreciation on labor, if it was applied.
Check which kind of limit you have
Some policies use a roof payment schedule instead, which pays a fixed percentage from a table by age and material. That is not negotiable the way an adjuster's depreciation estimate is, so know which one is on your declarations page.