Actual Cash Value vs. Replacement Cost

Did you know the age of your roof could affect your homeowner's insurance?

Some insurance companies are changing how they cover roofs based on their age. Historically, roofs were insured under Replacement Cost. However, some companies now mandate Actual Cash Value (ACV) for roofs older than 20 years.

What's the difference?

• Replacement Cost: Covers the full value of your roof replacement without factoring in depreciation due to age.

• Actual Cash Value (ACV): Covers the roof's value minus depreciation. This includes both age and normal wear and tear. For example, if your roof is 15 years old, your payout would reflect its current value, not the current cost to replace it.

The Good News: If your roof was replaced within the last 20 years, your insurance company may not have reflected that update—and if you notify them, you could save money on your premiums!  

To ensure your policy is up to date, it’s a good idea to contact The Insurance Pros or your local insurance agent. Ensure they have the most current information about your roof and verify whether you’re still covered for Replacement Cost.  They can then verify any additional savings that you may then be able to apply to your policy.