Replacement Coverage (RC) changing to Actual Cash Value (ACV)

Replacement Coverage means that the company will pay what it will cost to replace or repair the damaged item and WILL NOT deduct for age and wear and tear.

Actual Cash Value means that the company will pay what it costs to replace or repair the damaged item and WILL deduct for age and wear and tear.

What do you need to know?

• Insurance companies are converting replacement coverage for older roofs to the actual cash value.
• Think about how auto insurance works. When you damage your vehicle, the insurance company does not replace it. They give you market value to replace/repair it.
• Most insurance companies still have replacement coverage available for newer roofs ~ less than 10-15 years old.

Example of Replacement Coverage

• Damage to your 15-year-old roof after a wind/hail storm is $5,000.  The company will pay out $5,000 (minus your deductible)

Example of Actual Cash Value Coverage

• Damage to your 15-year-old roof after a wind/hail storm is $5,000.  The company will base the payout on replacement coverage and subtract for things like age, condition, and material of the roof (and your deductible).  The better the condition and age of your roof, the more the settlement could be.

Why are insurance companies doing this?

• Cost control—Amidst rising costs, insurance companies are looking for ways to manage expenses. Soaring materials and labor costs can impact insurance payouts, which ultimately translates to affordable insurance premiums.
• Risk management – companies can better predict their financial obligations by limiting payouts on older roofs.
• Depreciation—Older roofs have a higher depreciation rate and are considered high-risk due to potential underlying issues or nearing the end of their lifespan.

What can you do?

1. Please make sure that we have the most up-to-date year that your roof was last replaced. Newer roofs have fewer restrictions on coverage and prices.
2. Review your policies, at minimum, annually to ensure that all coverages are correct, you are aware of your deductibles, and so that there are no surprises if you have a claim.
3. Have your roof inspected by a trusted local roofer. Address any loose, broken, or worn shingles, loose nails, cracked sealant, flashing, moss growth, or other repairs now.
4. Ensure the gutters and downspouts are secure and have been cleared of debris.
5. Trim overhanging limbs, prune trees around the property as needed, and inspect trees for damage after a major storm.
6. Call us.  We want to help.

As we navigate the complexities of the present, we remain steadfast in our commitment to your future.  Looking to the horizon, we see a landscape of opportunities and challenges that we are eager to explore alongside you. Your trust in us fuels our dedication to seeking out the paths forward.