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Insurers value a damaged roof by taking its replacement cost and subtracting depreciation for age and wear, and this calculator shows exactly how that arithmetic lands on your settlement. Enter the replacement cost, the roof age and the expected life schedule for your material, and it applies straight line depreciation to produce the depreciation percentage and dollar amount, the actual cash value, the likely first payment after your deductible, and the recoverable depreciation a replacement cost policy should release once the work is finished and invoiced. You can also enter a depreciation cap, since many policies limit how far a roof can be depreciated. The difference between actual cash value and replacement cost settlement is the single most expensive line in your policy on an older roof, and this is the fastest way to see it in real numbers before you call the carrier. Educational estimate only, not insurance advice.
Roof depreciation matters in two places: an insurance settlement on an actual cash value policy, and the tax treatment of a roof on a rental or commercial property. They work differently and the difference is worth knowing before a claim.
| Actual cash value (ACV) | Replacement cost value (RCV) | |
|---|---|---|
| Pays | Replacement cost minus depreciation for age | Full cost to replace |
| On a 15-year-old roof | A fraction of the cost | The cost, usually in two payments |
| Premium | Lower | Higher |
| Recoverable depreciation | No | Yes, once the work is done and invoiced |
Which one your policy uses matters far more than the deductible does on an older roof. On an ACV policy a 15-year-old roof settles for a small proportion of what replacing it costs, and the shortfall is yours.
Your policy wording and your accountant. Depreciation schedules vary by insurer, by state and by policy, and tax treatment varies by jurisdiction and by how the property is held. Use a depreciation figure to understand the shape of a settlement, then read the actual policy.
By age against the expected life of the covering, usually straight-line — a roof half way through its expected life is depreciated about half. Condition can adjust it either way.
Actual cash value pays replacement cost minus depreciation, so an old roof settles for a fraction. Replacement cost pays the full cost, usually in two payments with the depreciation recoverable once the work is invoiced.
A replacement is generally a capital improvement depreciated over the property's recovery period rather than deducted in the year, while a repair that keeps the roof working usually is deductible. The line moves — ask an accountant.
No. Your policy wording does, and schedules vary by insurer and by state. Use a figure to understand the shape of a settlement, then read the actual policy.
Need the whole roof at once? The free roofing calculator works out roof area, squares, shingle bundles, underlayment, drip edge, ridge cap and installed cost from one set of measurements.