As a homeowner, you expect that your homeowner’s insurance policy is there to protect you if you experience damage to your home. Unfortunately, that’s not always the case. A Replacement Cost Value (RCV) Policy is just one example of how important it is to read through your insurance policy and make sure you fully understand your benefits.

Instead of waiting until you experience home damage to take a look at the fine print, pull your policy out now and get to know the details. Then, you can negotiate with your insurance provider to make sure they’re in your corner if you ever need to submit a claim. Often, it is worth paying a higher premium for an RCV policy than risking the headache of a less comprehensive policy down the road.

What Is an RCV Policy?

An RCV policy—or a Replacement Cost Value policy—is a clause within your homeowner’s insurance policy that stipulates how much money you get back for certain elements of your home if they become damaged. Essentially, if you have an RCV clause within your policy, it means that your insurance company will reimburse you based on the full estimate to replace that part of your home.

It is important to note that replacement cost value may fluctuate over time, so the estimate you get one year might be different the next, even if it’s from the same contractor. This can be affected by the current market value, supply chain issues, and the price of reparation at the time of evaluation.

The Difference Between RCV and ACV

Some insurance companies may include an Actual Cost Value (ACV) clause instead of an RCV clause. In this case, your provider only pays the appraised value of the element or property depending on its current value. This inevitably becomes a problem for you, the homeowner, because the actual value of your existing roof is more than likely less than what it would cost for a replacement.

For example, let’s say your roof is worth $7,000 at the time of purchase. Five years later, it depreciates to $3,500. If you need to have your roof replaced at this time due to irreparable damage, your insurance provider would only pay $3,500. But if you need to fully replace your roof due to extensive damage, it will likely cost much more than what your provider is paying, which leaves you to foot the rest of the bill.

Typically, ACV clauses are included in homeowners’ insurance policies when they have older roofs. Look through your current insurance policy or contact your provider to find out what they provide.

What to Do if Your Insurance Provider Doesn’t Pay Enough

If you have an ACV clause within your insurance policy, it will almost always lead to you having to fork out a portion of the bill when replacing your roof or other part of your home.

There are ways to avoid this if you have multiple trades approved on your insurance scope. For example, if you get roof, gutters, and siding approved but only at ACV value (meaning a partial payment), you are legally able to use the ACV funds from items such as gutters or paint to make up the difference in the missing depreciation to cover the full RCV of the roof. This way, you can still get your roof replaced without paying the depreciation on top of the deductible. However, this does mean that you may go without less important home features for a little while (or have to choose more affordable options).

Choose a Contractor That Values Your Assets

As with any legally binding document, you need to read the contract carefully to make sure it covers everything you expected. A detailed contract should include the scope of the work, warranties on materials and workmanship, and assurance that the contractor assumes responsibility for repairing your property in a timely manner. You also want to hire a contractor who demonstrates commitment to protecting your property by working as carefully as possible to avoid damages.

Any contractor you hire should use different types of equipment to protect your property and be willing to show it to you before starting their work. Equipment that catches debris from the roof or home as the contractor works is just one example. At Indy Roof & Restoration, we use a system called a Catch-All, which is a netting system that protects garage doors, windows, vegetation, and other exposed parts of the home that may be vulnerable to damage during the repair process. Always request these safeguards from your contractor to ensure the integrity of your home.

This is an additional step that can ensure you do not end up spending even more money out of pocket.

Roof Repair and Replacement in Indianapolis

If you are currently dealing with roof damage and you need repairs or replacements, Indy Roof & Restoration provides exceptional service and quality workmanship that values your home. We are well-versed in the asset appraisal process and both RCV and ACV policies. As you navigate the roof repair/replacement processes, we are here to help guide you step by step, and provide any information you need.

For roofing needs in the Indianapolis area, contact our team at Indy Roof & Restoration today to receive a hassle-free experience and get your home back to its best condition.

Aaron Christy

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