Common Insurance Loss Questions

Two of the most common questions we get from customers who have an insurance claim for their roof are: “What is the difference between ACV and RCV?” and “What is Depreciation?” Here is a brief explanation:

What is the difference between ACV and RCV?
ACV stands for Actual Cash Value which is the value of the damaged/destroyed item at the time of loss.
RCV stands for Replacement Cost Value which is the current fair market cost for repairing or replacing the damaged or destroyed item.
Usually, ACV is calculated as the RCV minus the Depreciation.

What is Depreciation?
Depreciation is the decrease in value of an item over time due to varying factors such as age or wear and tear.
If you have an RCV policy, you may be able to recover the depreciation amount of the damaged/destroyed item. There are often time limits involved in recovering depreciation. You should check with your insurance agent regarding the statute of limitations for recovering depreciation on your policy. Most policies only allow 365 days from the date of loss for depreciation to be recovered.

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