ACV roof vs replacement cost: how much does each actually pay?
Short answer. Replacement cost coverage pays what it costs to replace the roof today minus your deductible, usually in two payments with depreciation released after the work is done. ACV roof coverage pays the same replacement cost minus depreciation for the roof's age, minus the deductible, and the depreciation never comes back, so the older the roof, the bigger the difference.
Same storm, same estimate, two policies
Hypothetical: a replacement cost of $15,000, a $2,000 deductible, and a 25-year expected life for depreciation.
- 5-year-old roof: depreciation of 20 percent, or $3,000. Replacement cost coverage pays $13,000 in total. ACV coverage pays $10,000.
- 12-year-old roof: depreciation of 48 percent, or $7,200. Replacement cost pays $13,000. ACV pays $5,800.
- 20-year-old roof: depreciation of 80 percent, or $12,000, unless the insurer caps it. Replacement cost pays $13,000. ACV pays $1,000.
How the payments arrive
- Replacement cost: the first check is ACV minus the deductible. The held-back depreciation comes after you finish the work and send the final invoice, up to what you actually spent.
- ACV roof: one roof payment, with no second check for depreciation.
What this means for decisions
- On a newer roof, ACV terms cost you relatively little. On an older roof, they can cost most of the roof.
- Replacement cost coverage pays the full amount only if you actually replace the roof within the policy's time limits.
- If your roof is on ACV terms and getting older, budget for the gap or ask about better coverage after a replacement.