Actual Cash Value (ACV) insurance for your roof would reimburse you for the depreciated value of your roof, which might be around $7,500. This means you would have to pay out of pocket to replace your roof with a new one.
Replacement Cost (RCV) insurance for your roof, on the other hand, would reimburse you for the full cost of replacing your roof with a new one, which is currently around $15,000. This means you wouldn’t have to pay anything out of pocket.
In simple terms:
ACV pays you for what your roof is worth today, considering its age and depreciation.
RCV pays you the full cost to replace your roof with a new one, regardless of its age or depreciation.
Here’s a table summarizing the key differences between ACV and RCV for a roof:
|Feature||Actual Cash Value (ACV)||Replacement Cost Value (RCV)|
|Payment amount||Depreciated value of a damaged roof||Full cost to replace a damaged roof|
|Out-of-pocket expenses||May require out-of-pocket expenses to replace the roof||No out-of-pocket expenses for roof replacement|
|Premium cost||Typically lower premiums||Typically higher premiums|
The decision of which type of roof insurance coverage to choose depends on your individual circumstances and risk tolerance. If you’re on a tight budget, ACV may be a good choice. However, if you want the peace of mind knowing that you’ll be able to replace your roof without any out-of-pocket expenses, RCV may be a better option.
As always, our team at Huser Insurance can help you determine what fits you and your budget.