The report that your insurance adjuster sends you after they inspect your roof is CONFUSING. We hope this article helps you start to decode it, understand the process better, and make informed, confident decisions about what’s best for your home and your family…
RCV = Replacement Cost Value
This is the amount it will cost to repair your roof. If you get every line item in the report fixed by a roofing contractor, this is the total amount that you’ll end up with in the end minus your deductible.
In your report, you’ll see line items listed for each side of your home and the roof itself. These line items are in insurance/contractor language that, unless you’re in the industry, won’t make much sense. Ask your contractor to decode the terms so you can know what’s being covered. There’s no shame in not being able to decode those line items!
Your deductible is like your co-pay at the doctor’s office. You’ll need to pay some amount out of pocket to get a new roof. Your deductible might be a fixed amount (such as $1,500) or it might be a percentage of the value of the dwelling (NOT the amount of the claim) such as 1%. So if your house was worth $200,000 when you took out your insurance policy, and if you have a 1% deductible, $2,000 will come off of the Replacement Cost Value. Depreciation will also come off of the RCV, but we’ll get to that in a minute.
ACV = Actual Cash Value
This is the amount it will cost to repair your roof minus depreciation and minus your deductible. Typically, this is the amount of the first check that you receive from your insurance company. You’ll receive a second check after the work is completed. You’ll use the first check, the ACV check, to pay your contractor for the materials and labor to get started. Think of the first check as a large deposit but not the full amount.
Just like a used car is worth less than a brand new car, an older roof is worth less than a brand new roof. Depreciation represents how much less your roof is worth compared to a brand new roof. After the work is done, your roofing contractor will send a bill to both you and to your insurance company.
This is the fun part. Your insurance will then cut you a second check for the amount of depreciation that you got fixed. It’s sort of a “thank you for fixing your roof” check. Fun right?
You don’t HAVE TO get EVERYTHING fixed that’s in the report
Let’s just say for fun that a hail storm dents your gutters. Chances are your gutters will be included in the report to be removed and replaced (or R&R as its shown in the report). Chances are your gutters will still function properly and the damage is purely cosmetic. Being that your gutters are on the roof, chances are you don’t really care if they have a little bit of cosmetic damage.
You don’t HAVE TO get your gutters replaced. You can use the amount that was given to you in the ACV check to do whatever you want. Just know that you won’t get the depreciation value of the gutters back in that second check at the end. Chances are you’re okay with that. You can use that extra ACV money to upgrade your roof, or paint your house, or fix something else.
Of course if there’s damage that causes something on your home to not function properly you should get it repaired/replaced.
If you have any questions about the report, give us a call at (719) 749-1788. We love taking care of people and making this stressful process easier to understand and get done.
If you’re looking for a roofing contractor that you can trust…
Homefix is locally owned and operated and has been since 2007. That’s important when you’re working with a roofing contractor because you’ll want to be able to get in touch with them easily months later if you need to (you also don’t want to get scammed). We offer a 5 year warranty on materials and labor for all roof replacements. Our goal is to exceed expectations in every way which includes putting our customers in a position that they only pay their deductible. Check out our reviews.