Frequently Asked Questions
Replacement Cost
Although you may have a “Value” or “RCV” policy on your home, the RCV coverage typically only applies if the repairs/or the replacement has been completed. Typically your initial payment is based on “Actual Cash Value or ACV” of the damages. Below are questions that will explain what depreciation is and how the depreciated amount is released by the insurance company.
What is replacement cost (RCV)?
Replacement cost is the actual cost that you incurred for the repairs or replacement of the damaged items with like quality and kind, without any deduction for depreciation.
What is actual cash value (ACV)?
Actual cash value is based cost to repairs or replacement of the damaged items with like quality and kind, less depreciation.
How is deprecation calculated?
Deprecation is calculated based on the life expectance of the item, with the possibility there will be adjustments for age and condition. Insurance companies work of deprecation tables. Similar deprecation tables can be found on line. Every item that is in your home or part of your home can be found in a deprecation table. For example; Let’s assume that the normal life expectancy of the roofing material is 20 years. Under normal conditions the roof depreciates at a rate of 5 percent per year If the roof is 8 years ago with typical wear and tear, the depreciated amount is 40 percent. ( 5 percent x 8 years = 40 percent.) The actual cash value (ACV) of the roof is 60 percent of the replacement cost. ( 100 percent – 40 percent =60 percent)
What will I be paid?
Typically the insurance company pays on the actual cost. If your policy has replacement cost coverage you are entitled to also be paid the recoverable deprecation that has been withheld after the repairs or replacement is completed.
How do I apply for the recoverable depreciation/ replacement cost benefit?
Typically once the repairs or replacement is completed you provide proof that the work has been completed to your satisfaction to the insurance company. Such proof is the invoice for the amount that was agreed upon with American Roofing &Exteriors. All the repairs to your home do not have to be completed at the same time. Example: The recoverable deprecation for the roofing can be submitted when the work is completed however the repairs to the siding may not yet been completed. The insurance company will then forward the correct amount of withheld depreciation. Please remember to write your claim number on all correspondence with the insurance company.
Are there deadlines I must meet to collect the recoverable depreciation?
In most cases you have one year from the date of the damage (date of loss) to file your claim and complete the repairs/replacement. Typically your insurance company will allow for an extension to your ability to recover the withheld depreciation if you ask for it in a written request.
What is my guarantee?
The manufacturer of the singles and other products provide the guarantee for their products. Example: The single manufacture provides the guarantee for the life of the product which is typically between 25 and 50 years. American Roofing & Exteriors guaranties that the workmanship will be free from defects for a period of 2 years from the date of install.