How much will the insurance company pay for a roof replacement?
Short answer. If the replacement is approved, the insurer pays the estimated replacement cost of the roof minus your deductible, and also minus depreciation if your roof is settled at actual cash value. On a replacement cost policy, the depreciation is paid later once the roof is finished, so the total is the full approved estimate less the deductible.
Three ways the payout is calculated
- Replacement cost (RCV). Full estimate minus deductible, paid in two parts: actual cash value first, depreciation after completion.
- Actual cash value roof. Estimate minus depreciation minus deductible. The depreciation is never paid.
- Payment schedule. A percentage of the estimate based on roof age and material, minus the deductible.
Worked example
Hypothetical estimate: $16,000 replacement cost, $6,000 depreciation on a roof about 15 years old, and a $2,000 deductible.
- RCV policy: $8,000 first check, $6,000 later, $14,000 in total from the insurer.
- ACV roof: $8,000 in total.
- Payment schedule at 50 percent: $8,000 allowed, minus $2,000, so $6,000.
What changes the estimate itself
- Roof size and waste factor, from measurements or aerial reports.
- Pitch, number of stories and layers to tear off.
- Line items such as drip edge, starter, ridge cap, flashing, ice barrier and vents.
- Overhead and profit, when a general contractor is reasonably needed.
- Code upgrades, if you carry ordinance or law coverage.
The first estimate is rarely the final number. Items it missed are added through a supplement, backed by photos and measurements. Keep every version of the estimate, because the changes between them show exactly what was added and why.