Roof Coverage: Full Replacement Cost or Actual Cash Value
Do you know what type of roof coverage insurance you have? With storm season upon us in Oklahoma, homeowners need to ask this question. Omega Insurance typically only hears this question when writing new business. Did you know the type of coverage you have on your roof can change at each renewal?
There are two different ways insurance companies value your roof:
- Replacement Cost Value (RCV)
- Actual Cash Value (ACV)
It’s important to educate yourself on the difference between the two. Know which coverage you have and which will work best with your household budget.
Roof Replacement Cost Value Coverage
Almost all new roofs on a dwelling have replacement cost coverage. What does this mean? At the time of a covered loss, your insurance carrier pays the full replacement value of your roof, less your deductible. Nothing will be depreciated. As a reminder, always know where your deductible limits are set. Higher deductibles result in lower premiums; yet, out of pocket expenses at claim time are higher. That could add up to be thousands of dollars.
Actual Cash Value Roof Coverage
Every year Oklahoma sees an enormous amount of hail losses. Because of this, all our carriers change coverage on your roof to ACV after your roof turns a certain age.
- Some carriers switch to ACV after your roof is only 5 years of age.
- Others change coverage to ACV after upwards of 10 years of age.
How each company depreciates the value of your roof varies. Most depreciate based on age and condition. We are seeing more and more of our carriers depreciate by a certain percentage each year. If this is how your carrier depreciates, then they include that depreciation schedule in your policy jacket. Again, it’s important you know what your deductibles are. For ACV roof coverage, your deductible comes out of pocket, as well as the depreciated value.
Knowing Your Home and Roof Coverages
The verbiage included in your policy jacket can be daunting, and at times, very confusing to read. Do you have any questions about how your home is covered? Would you like help to understand what your roof coverage insurance includes? Feel free to give our office a call, (405) 769-6701 or send us an email. Our knowledgeable staff would be more than happy to review your coverages with you.