How much does insurance pay on a roof claim, and how is the check figured?
Short answer. Insurance pays the replacement cost of the covered damage as priced on the adjuster's estimate, minus your deductible. On a replacement cost policy the first check also subtracts depreciation, which is paid later once the roof is replaced; on an actual cash value roof, depreciation is subtracted for good.
The formula on your estimate summary
Replacement cost value (RCV) minus depreciation equals actual cash value (ACV). ACV minus your deductible is the first check. Recoverable depreciation, plus any approved supplements, comes later.
Three example roofs
- Newer roof, replacement cost policy: RCV $12,000, depreciation $1,200, deductible $1,000. First check $9,800, second check $1,200, total $11,000.
- Older roof, replacement cost policy: RCV $12,000, depreciation $5,000, deductible $1,000. First check $6,000, second check $5,000, total $11,000.
- Older roof, actual cash value roof endorsement: same numbers, but the $5,000 never comes. Total $6,000.
Where the RCV comes from
Adjusters price roofs in estimating software using a regional cost database, not your roofer's bid. If your roofer's price is higher, the real question is whether the estimate missed items, not whose price wins. Missing items are added through a supplement, and overhead and profit may be added when a general contractor is reasonably needed to coordinate trades.
Who the check is made out to
You, plus your mortgage company if it is listed on the policy. See getting a check endorsed by your mortgage company and ACV vs RCV.