Are non-recoverable depreciation policies cheaper?
How the trade works
With replacement cost coverage, depreciation is held back from the first check and released after the roof is replaced. With non-recoverable depreciation, it is subtracted and never paid. On an older roof that can be a large share of the cost.
A hypothetical: a $15,000 roof replacement on a roof the insurer treats as 60 percent depreciated. Under replacement cost, you collect $15,000 minus your deductible, in two payments. Under actual cash value, you collect $6,000 minus your deductible. That $9,000 gap is the risk you took on in exchange for the lower premium.
Questions to ask before choosing
- How many dollars a year does the cheaper option actually save on my policy?
- How old is my roof, and how fast does the depreciation or schedule cut the payout?
- How often does hail reach my area? Spring hail is common across North Georgia.
- Could I afford a replacement with only the depreciated amount?
When it can make sense
If replacement cost is not offered for your roof's age, a non-recoverable option may be the only one on the table. On a young roof, early depreciation is small, so the gap matters less for the first few years. For a roof in the middle of its life in a hail-prone area, the premium savings are often small next to the exposure.
Read the full comparison at ACV vs RCV and the schedule version at roof payment schedule endorsement.