Filing a storm damage claim with your insurer is trickier than it seems. Not to mention the technical terms used in insurance estimates and policies can be confusing.
To help make the insurance filing process easier, the roofers at Allstar Construction of Fargo explain what the actual cash value (ACV) and a replacement cost value (RCV) mean as well as the difference between the two.
How Insurers Calculate Your Insurance Payout
Insurance companies use the ACV to calculate your insurance payout. The problem is the term ACV has several legal definitions. However, most courts recognize that the ACV’s standard legal definition in the insurance industry is the replacement cost (the value of your roof at the time it was damaged) minus your deductible and depreciation (the loss of value due to your roofing system’s age).
Important note: While some insurers take into account the loss of value due to outdated roof designs when calculating depreciation, others don’t. If you want to learn more about how your insurance payout is calculated, it’s best to consult your insurance agent.
The Difference Between the Two
What’s the main difference between the ACV and the RCV? Both are calculated the amount needed to repair or replace damage to your property, but the formula for calculating the former includes depreciation while the latter’s formula doesn’t.
What to Submit When Filing an Insurance Claim
Before submitting a claim, it’s important to make sure you have all of the necessary documents. For instance, insurers require policyholders to submit documentation of storm damage. That’s why homeowners should do a quick visual inspection and take pictures of exterior damage after an extreme weather event. And since it’s easy to miss the warning signs of storm damage, it’s best to let a professional contractor from one of your local roofing and door companies handle the roof inspection.
Looking for roofers near you? Here’s a tip: The number of years a contractor has in business should give you a good idea of their level of expertise.
Allstar Construction of Fargo has been serving local residents since 1979. We offer a wide range of professional exterior services, including roof and window repair services and insurance claims processing assistance. To request a free estimate, call us at (701) 478-7663 or fill out this form.