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ACV, RCV, and Deductibles! Oh My!

ACV, RCV, and Deductibles! Oh My!

You might want to pull out your insurance policy to make sure that you are paying for the coverage that you think you have in place on your home’s roof. Some insurance companies have changed by replacing replacement cost value with actual cash value, and you may have much less coverage than you believe. As a result, you may want to put money away in a savings account or look for a different insurance policy or both.  

Actual Cash Value (ACV)

If your insurance policy says that the insurance company will pay you the actual cash value for your roof, you may not have enough money after a claim to put on a new roof. Here is an example. Assume for a moment that you have an asphalt shingle roof valued at $10,000. The roof is ten years old, and according to your policy, it loses $1,000 in value every year. A hail storm comes through your area and destroys your roof. You take the $1,000 and multiply it times ten, and you get $10,000. The insurance company ends up paying nothing for your roof, and you have to stand the entire cost to have it repaired.  

Let’s look at another example. Assume that you have a metal roof that was valued at $20,000 when new. The roof has been in place for three years, and the insurance company says it loses $1,000 value for every year. You also have a $5,000 deductible. A hailstorm destroys your roof. You take the $20,000 and subtract the deductible off the top, so the most that the insurance company is going to pay you is $15,000. Then, you deduct the $3,000 for lost value over the last three years. Suddenly, instead of paying you to have a roofer in Orlando put on a new roof, you have to come up with the difference between the $20,000 the roofer wants and the $12,000 the insurance company is willing to pay you. Do you have $8,000 set aside to put a new roof on your home?

Replacement Value Costs

Some insurance companies are still writing policies based on your roof’s replacement value. If this is your type of policy, then the insurance company will pay you to have a roofer in Orlando put on a new roof. These policies are often more expensive, and you will still have to come up with the deductible money.  

While you will have to weigh the pros and cons of ACV vs. RCV for yourself, one decision is incredibly easy. When you need a new roof contact JV Contractors Inc. This contractor specializes in being the best roofer in Orlando. You can trust his expert opinion on what option you should follow to get your roof replaced after the storm. You will not find better craftsmanship than that offered by JV Contractors Inc who earnestly wants to be your roofer in Orlando.