The Confusing Part
Two homeowners can buy the same policy limits and still see very different roof claim outcomes.
The difference is usually settlement method, not the roof itself.
How It Works
ACV (actual cash value) pays the roof’s depreciated value. RCV (replacement cost value) pays the cost to replace after work is done.
RCV reduces your out-of-pocket exposure. ACV shifts that depreciation risk back to you.
Where It Breaks Down
ACV stops working for households that cannot fund the depreciation gap at the time of loss.
RCV stops feeling worth it when the premium delta is larger than the expected depreciation you would absorb.
The Tradeoffs
- ACV: lower premium, higher out-of-pocket after a loss.
- RCV: higher premium, more certainty when the roof is replaced.
What Moves the Outcome
Risk Signals
- Roof age and claim history
- Local hail and wind loss frequency
Coverage Structure
- ACV vs RCV settlement
- Depreciation assumptions and endorsements
Market Context
- Carrier appetite for older roofs
- Repricing pressure after regional loss cycles
Deeper context
For the step-by-step, see ACV vs RCV: How a Claim Check Gets Built.
How to Decide
If you can fund depreciation, ACV can fit. If not, pay for RCV.
Minnesota note: rates and carrier appetite can swing by county, so a Twin Cities renewal isn’t always a perfect proxy for greater Minnesota.