Homeowner's Insurance 101: ACV vs RCV Policies
- Jason Inoue
- 4 minutes ago
- 3 min read
When Texas storms hit and your roof takes damage, your homeowner’s insurance coverage determines how much of the repair or replacement cost is covered.
One of the biggest points of confusion we see with homeowners is the difference between ACV (Actual Cash Value) and RCV (Replacement Cost Value) insurance policies.
Understanding this difference before a storm can help you make informed decisions and avoid expensive surprises later.
Disclaimer: Fine Finish Construction is not a public insurance adjuster and does not offer legal or insurance advice. This article is for educational purposes only to help homeowners understand general roofing and insurance terminology. Always consult directly with your licensed insurance agent for questions about your specific policy or coverage.
1. What Is an ACV Policy? (Actual Cash Value)
An ACV policy pays for the depreciated value of your roof, in other words, what your roof is worth today, after accounting for its age and wear.
That means if your roof is older, your insurance company may only cover a portion of the total replacement cost.
Example: If a new roof costs $20,000, but your roof has depreciated by 50%, the insurance company may only pay $10,000, and you’d be responsible for the remaining cost (plus your deductible).
Key takeaway: ACV policies typically come with lower premiums, but they often result in higher out-of-pocket expenses when it’s time to repair or replace your roof.
2. What Is an RCV Policy? (Replacement Cost Value)
An RCV policy covers the full replacement cost of your roof with materials of similar kind and quality without deducting depreciation.
Typically, insurance companies issue payments in two parts:
The initial ACV payment (the depreciated value).
The recoverable depreciation payment, which is released after the roof has been replaced and all paperwork has been submitted.
Example: If your total roof replacement is $20,000 and your deductible is $2,000, your insurance may pay around $18,000 in total, once work is completed and approved.
Key takeaway: RCV policies usually have higher premiums, but they provide more complete protection when storm damage occurs.
3. Why Understanding This Matters
Knowing whether your policy is ACV or RCV can help you set proper expectations if you ever need to file a claim.
Many Texas homeowners assume their policy will cover 100% of the replacement cost, only to learn that their ACV policy pays much less after depreciation. That’s why it’s important to review your coverage before storm season and talk with your licensed insurance agent to confirm what kind of policy you have.
At Fine Finish Construction, we regularly help homeowners understand the roofing side of the process by identifying storm-related damage, documenting it accurately, and providing detailed estimates that align with insurance claim requirements.
We do not interpret insurance policies or negotiate claim values. Our role is to ensure the roofing portion of your claim is properly inspected, documented, and completed with the highest craftsmanship and transparency.
4. How Fine Finish Construction Supports Homeowners
While your insurance company and agent handle the claims process, our team focuses on:
Conducting free, no-obligation roof inspections to identify damage.
Providing detailed repair and replacement estimates for your records.
Coordinating with you and your adjuster to ensure the roofing scope of work is accurate and complete.
Delivering high-quality workmanship that meets all Texas building codes and manufacturer specifications.
Our goal is to make the process as smooth and stress-free as possible, while keeping you fully informed every step of the way.
Final Thoughts
Whether your homeowner’s policy is ACV or RCV, knowing the difference helps you plan ahead and avoid financial surprises after a storm.
If you’re unsure which type of coverage you have, reach out to your licensed insurance agent for clarification. If you’d like a free inspection to see if your roof has storm-related damage, Fine Finish Construction is here to help with honesty, professionalism, and a commitment to doing things the right way.
Schedule your free roof inspection today with Fine Finish Construction. We’ll help you understand your roof’s condition, provide clear documentation, and ensure you’re ready for whatever Central Texas weather brings.
Call or text us at (512) 402-2356
Email: info@finefconstruction.com