What is an actual cash value roof endorsement?
Short answer. It is an add-on to a homeowners policy that changes how the roof is paid after a covered loss: instead of replacement cost, the insurer pays actual cash value, meaning the cost to replace the roof minus depreciation for its age and condition. That depreciation is never paid back, even after you replace the roof.
How to tell if you have one
- Look at the endorsements listed on your declarations page for wording like actual cash value loss settlement for roof surfacing, or roof surface ACV.
- Read the endorsement itself. It defines roof surfacing, usually shingles, underlayment and flashing, sometimes vents and drip edge.
- Check when it appeared. Many carriers add it at renewal once a roof passes a certain age, with a notice that is easy to skim past.
What it does and does not change
It changes the settlement method for the roof surface only. The rest of the house, interior water damage and other structures typically stay on replacement cost. It does not change whether hail or wind are covered, and the deductible still applies, subtracted after depreciation.
Why it hurts most on older roofs
Depreciation on asphalt shingles is usually spread across an expected life of roughly 20 to 30 years. A roof halfway through that life can lose about half its value in the settlement, and then the deductible comes off. On some claims the net check is small.
Your options
- Ask your agent whether replacement cost on the roof can be bought back, and at what price.
- Shop other carriers, since some keep replacement cost on newer roofs.
- Replace the roof when it is due; age-triggered endorsements often fall away with a new roof.
See ACV vs RCV, and the close cousin of this endorsement, the roof payment schedule.