What does ACV mean on a roof?
Short answer. ACV, or actual cash value, is what your roof was worth at the time of the loss: the cost to replace it today minus depreciation for its age and condition. On a roof claim it is either the first payment on a replacement cost policy or the full roof payment under an ACV policy or endorsement.
How insurers depreciate a roof
- Age: the starting point. Insurers usually depreciate in proportion to the roof's age compared with its expected life.
- Expected life: varies by material. Insurers set their own life expectancies, and architectural shingles typically get a longer one than 3-tab shingles.
- Condition: a well-kept roof may be depreciated less than its age suggests, a neglected one more.
- Caps: many insurers stop depreciating at a maximum percentage.
- What gets depreciated: materials always; labor and some line items depend on carrier practice and state rules.
Where ACV appears
Your estimate typically lists RCV, depreciation and ACV for each line, with totals at the bottom. On a replacement cost policy, the ACV total minus the deductible is the first check, and the depreciation is held back until the work is done. Under an ACV roof endorsement, the roof's depreciation is not paid back.
How to check your ACV
- Find the roof age the adjuster used and compare it with your records.
- Ask what life expectancy was used for your material.
- Look for depreciation on items that may not warrant it, like permits or debris removal.
- Send corrections in writing with proof, such as an invoice or permit showing the installation year.
See recoverable depreciation for how held-back money is collected and how to read an Xactimate estimate to find these numbers.