RCV vs. ACV: What Your Ohio Homeowners Policy Really Pays on a Roof Claim

Picture two houses next door to each other in Parma. Same wind storm, same missing shingles, same $15,000 roof estimate. One homeowner ends up with nearly the whole roof paid for. The other gets a check for a few thousand dollars and a big bill.

Nine times out of ten, the difference isn't the damage. It's the policy. Specifically, whether the roof is covered at replacement cost value (RCV) or actual cash value (ACV).

Most people don't look at this until they're standing in the driveway with an adjuster. Let's fix that.

• RCV (replacement cost value) pays what it actually costs to repair or replace your roof with new materials of like kind and quality, without taking off for age. You still pay your deductible.
• ACV (actual cash value) pays the replacement cost minus depreciation, meaning the insurer subtracts for the age and wear on your old roof. Then you pay your deductible on top of that.

The Ohio Department of Insurance puts it plainly: if your policy pays on an actual cash value basis, you "will likely not be fully compensated for the cost to repair or replace the damaged property."

The National Association of Insurance Commissioners (NAIC) uses an example that lines up almost exactly with our two Parma neighbors. Both have $15,000 of roof damage and a $1,000 deductible:

Same roof. Same storm. A $10,000 difference. That's why this matters.

Depreciation is the insurer's estimate of how much of your roof's life has already been used up. The NAIC says insurers usually base it on the condition of the property when it was damaged, what new materials would cost, and how long that item would normally last.

So a 3-year-old roof in Westlake loses a lot less value than an 18-year-old roof in Elyria, even if the storm damage is identical.

Here's a useful Ohio detail: under Ohio's claims rules (Ohio Administrative Code 3901-1-54), when a policy settles on an actual cash value basis, the insurer figures ACV as the replacement cost at the time of loss, including sales tax, minus depreciation. And if you ask, the insurer has to give you documentation detailing all the depreciation it took. If a number looks off, ask for that breakdown.

This part surprises a lot of people. Even with a replacement cost policy, you often don't get the full amount up front.

1. 1First check: the ACV amount. The insurer pays the depreciated value minus your deductible.
2. 2Second check: the "recoverable depreciation." The insurer holds back the depreciation and releases it after the work is done and you send proof, usually the final invoice and photos of the finished roof.

Standard homeowners policy language often says the insurer will pay no more than actual cash value until the actual repair or replacement is complete. So that first check can look scary low. On an RCV policy, that's normal. The rest comes after the roof is finished.

Our tip: keep everything. The signed contract, the final itemized invoice, proof of payment, and photos of the finished roof. Ask your roofer for that paperwork up front so the second check isn't held up.

The Ohio Department of Insurance notes that to get full replacement cost, many policies require the repair or replacement to be finished within a reasonable timeframe, such as 180 days from the date of the loss. Miss it, and the settlement may be limited to actual cash value.

In Northeast Ohio that matters more than you'd think. A storm in November plus a cold, snowy winter can eat up a big chunk of 180 days. If your claim is open:

• Look up the exact deadline in your policy, or ask your agent to tell you in writing.
• Get on a roofer's schedule early.
• If you're worried about winter weather pushing you past the deadline, talk to your insurer before the deadline, not after.

Good news: roofs can be replaced in cold weather with the right precautions. Our post on replacing a roof in fall or winter explains how.

The Ohio Department of Insurance points out that most Ohio homeowners policies have two deductibles: one for "all other perils" and a separate one for wind and hail. Since most roof claims around here come from wind or hail, that second one is the one that usually applies.

The tricky part is when it's a percentage. A 2% wind/hail deductible isn't 2% of the damage. It's 2% of what your home is insured for. The department's example: a home insured for $300,000 with a 2% wind/hail deductible means $6,000 out of your pocket, no matter how big or small the damage is.

These come straight from the Ohio Department of Insurance's list, and they're worth asking before the next storm, not after:

1. 1Does my policy settle roof claims on a replacement cost or actual cash value basis?
2. 2Does the age, condition, or type of my roof change whether it's RCV or ACV?
3. 3If my roof is currently covered at ACV, would replacing it make me eligible for replacement cost coverage?
4. 4Is my wind/hail deductible a flat dollar amount or a percentage?
5. 5How quickly do I have to report roof damage?

Some policies switch older roofs to ACV, or pay roofs on a schedule based on age. The only way to know what yours does is to read it or ask.

The Ohio Department of Insurance also warns homeowners about contractor fraud after storms. A few of their do's and don'ts that we agree with 100%:

• Don't let a contractor inspect your property when you're not home.
• Don't give a contractor power of attorney or let them negotiate or settle your claim for you.
• Pay by check or card, not cash, so there's a record.
• Don't pay in full or sign a completion certificate until all the work is done.

If you're still sorting out whether your damage is from a storm or just age, read our post on hail damage vs. normal wear. For the claim process start to finish, see how to file a roof insurance claim in Ohio.

We can't tell you what your policy says. Your agent can. What we can do is get on your roof, document the damage with photos, and give you a clear, itemized estimate, so you're working from real numbers when you talk to your insurance company.

We inspect roofs across Northeast Ohio, including Parma, Westlake, Elyria, Medina, and Mentor. Learn more about our storm damage service and roof replacement. Inspections and quotes are always free.

Pring Roofing has served Northeast Ohio since 1936. We're fully insured, hold a BBB A+ rating, and are an Owens Corning Preferred Contractor, an Elevate (formerly Firestone) Licensed Applicator, and a Carlisle authorized applicator.

Call (216) 941-6298 or email contact@pringroofing.com, or request a free quote online. We answer 7 days a week, 7am to 10pm.

Sources: Ohio Department of Insurance, "Roof Insurance - Repair and Replacement"; National Association of Insurance Commissioners (NAIC), "Rebuilding After a Storm? Know the Difference Between Replacement Cost and Actual Cash Value"; Ohio Administrative Code 3901-1-54, Unfair Property/Casualty Claims Settlement Practices; Insurance Information Institute, "How Is the Settlement Amount Determined?" This post is general information, not insurance or legal advice. Your policy's actual wording controls, so check it with your agent.