What is roof replacement cost coverage?
Short answer. Replacement cost coverage pays what it costs to replace a damaged roof with materials of like kind and quality, minus your deductible, without subtracting for age. Many policies pay it in two parts: the actual cash value first, then the withheld depreciation after the roof is replaced.
Replacement cost versus actual cash value
- Replacement cost value (RCV): the full price to replace the roof today.
- Actual cash value (ACV): RCV minus depreciation for age and wear. On a 15 year old roof that can be a large reduction.
How the payment usually arrives
- The insurer pays the ACV, minus your deductible.
- You complete the replacement.
- The contractor's final invoice goes to the insurer, which releases the recoverable depreciation, often within a deadline set in the policy.
Things that change the picture
- Roof age schedules. Some policies switch the roof to ACV or a payment schedule after a certain age. Read your declarations and endorsements.
- Percentage deductibles. A wind and hail deductible stated as a percentage of dwelling coverage can be large.
- Code upgrades. Items required by current code but not present on the old roof may need ordinance or law coverage.
How to check your policy
Look at the declarations page for the loss settlement terms and any roof related endorsements. If the language is unclear, ask your agent in writing. For more, see ACV vs RCV roof claims, and on this site, how long a roof lasts in Georgia and roof replacement cost in Georgia.