Roof Insurance Policies
Choosing a new homeowners insurance policy can be a daunting process. When beginning your search, we recommend really reviewing what is covered in each policy, rather than simply shopping by price. If and when the worst strikes (think major hail or wind damage) you will want a clear understanding of what is – or is not – included in your policy.
The roof is one of the most commonly affected areas on homes and buildings and because of this, it is often covered differently than the rest of your home. When choosing a new homeowners insurance policy, it is important to understand whether your roof repair and replacement coverage is based on Actual Cash Value (ACV) or Replacement Cost (RC). Below we will explore the differences between the two and discuss how each will affect your out of pocket costs in the event of severe weather damage to your building. It is critical to go through these options with an insurance agent prior to deciding on what fits you best.
Actual Cash Value
Actual Cash Value is the actual dollar amount that your roof is worth, taking both age and depreciation into consideration. If you have ACV based coverage and your roof is damaged, your insurance adjuster will first look at how long the roof was expected to last at time of installation. If the roof was expected to last for 20 years and you’ve had it for 10 years, you will receive half of the original value for replacement.
ACV coverage is typically the most common roofing repair and replacement coverage available.
Replacement cost is the dollar value that it would take to replace or repair your roof to new, not taking into account age or deprecation. When a policy has RC based coverage in place, you do not need to worry about how old your roof is when the damage occurs, your insurance company will cover the cost to replace the damaged roof.
RC coverage is not as common as ACV and it often times comes at an additional premium.
Which policy do we recommend?
At PRQ Exteriors, we recommend choosing a RC based policy over an ACV based policy whenever possible (contact your insurance agent to confirm). Although you may pay a more expensive monthly premium with RC coverage, that will likely outweigh any potential costs you would have to pay on an ACV based policy should the worst happen.
If an ACV based policy is the only option available to you, be sure you understand exactly how depreciation will be calculated so you are not surprised if and when you need to rely on your policy.
If you are currently facing a roof replacement or repair, we invite you to reach out to the team of PRQ Exteriors. Be sure to connect with your insurance agent to confirm you are deciding on the right coverage for your home.