Two homes can have the same hail damage and get very different checks. Usually that's because of how the policy values the roof. It's worth understanding this before you ever need to file.
The two main types
| Replacement cost (RCV) | Actual cash value (ACV) | |
|---|---|---|
| Pays for | What a new roof costs today | The roof's value after depreciation |
| Roof age | Matters for the first payment, not the total | Matters a lot — older roofs pay less |
| Premium | Usually higher | Usually lower |
A simple example
Say a replacement is estimated at $20,000, the roof is halfway through its life and your deductible is $2,000. These numbers are only for illustration:
- Replacement cost policy: a first check of about $8,000 (the $10,000 depreciated value minus the deductible), then roughly $10,000 more after the work is done and invoiced.
- Actual cash value policy: about $8,000, and that's it.
Other terms to look for
- Percentage deductibles. Some wind and hail deductibles are 1% or 2% of your dwelling coverage. On a home insured for $500,000, a 2% deductible is $10,000.
- Roof payment schedules. Some policies pay a fixed percentage based on the roof's age.
- Cosmetic damage exclusions. Some policies won't pay for dents that don't affect how the roof works — common with metal roofs.
- Code upgrades. "Ordinance or law" coverage can pay for code-required items found during the work.
Why there are two checks
On a replacement cost policy, the insurer holds back the depreciation until the roof is actually replaced. Once your roofer sends the final invoice and photos, the insurer releases the rest. The first check is often made out to you and your mortgage company.
Check your policy now
Look at your declarations page and ask your agent three questions: Is my roof covered at replacement cost? What's my wind/hail deductible in dollars? Is there a cosmetic damage exclusion?
Questions about a roof claim? Call (505) 230-4024 for a free inspection and a written estimate.
Questions homeowners ask
Can I switch from ACV to replacement cost?
Sometimes. Ask your agent, and expect the premium to change.
Do I have to replace the roof to get paid?
To collect held-back depreciation on a replacement cost policy, generally yes — the work has to be done.
Why is my mortgage company on the check?
Lenders often require it because the home secures the loan. They endorse the check, sometimes in stages.