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Replacement cost minus your deductible on a replacement cost policy, paid in two checks; minus depreciation as well on an actual cash value policy. A $16,000, 12-year-old shingle roof with a 2% deductible on $300,000 of dwelling coverage pays $10,000 on replacement cost and $2,320 on actual cash value.
A roof claim pays the replacement cost of the damage, minus depreciation for the roof's age if the policy settles at actual cash value, minus your deductible. On a replacement cost policy the depreciation is held back and paid once the work is finished. The deductible is often the surprise: in hail and wind states it is frequently a percentage of your dwelling coverage rather than a flat amount, and 2% of $300,000 is $6,000. Enter the estimate, the roof's age, how your policy settles and how your deductible is written, and this calculator shows the first check, the recoverable depreciation, any code-upgrade money and what you pay yourself.
An architectural shingle roof, 12 years old, needs replacing after hail. The contractor's estimate is $16,000. Dwelling coverage is $300,000 and the wind/hail deductible is 2% of it. On a 25-year schedule the roof is 12 ÷ 25 = 48% depreciated.
| Replacement cost policy, 2% deductible | Actual cash value policy, 2% deductible | Replacement cost policy, $1,000 flat deductible | |
|---|---|---|---|
| Replacement cost | $16,000 | $16,000 | $16,000 |
| Depreciation (48%) | $7,680 | $7,680 | $7,680 |
| Actual cash value | $8,320 | $8,320 | $8,320 |
| Deductible | $6,000 | $6,000 | $1,000 |
| First check | $2,320 | $2,320 | $7,320 |
| Released after the work | $7,680 | Nothing | $7,680 |
| Insurer pays in total | $10,000 | $2,320 | $15,000 |
| You pay | $6,000 | $13,680 | $1,000 |
The same roof and the same storm produce a payout between $2,320 and $15,000 depending on two lines on the declarations page: how the roof is settled and how the deductible is written. Read both before you call a contractor, not after.
Not modelled: labour depreciation rules (some states restrict depreciating labour), sales tax treatment, overhead and profit, mortgage-company endorsement of checks, and the separate deductible some policies apply to other perils. Your adjuster's itemised estimate shows every one of those line by line.
Many homeowners policies in hail- and hurricane-exposed states carry a separate wind/hail or hurricane deductible written as a percentage of the home's insured value. The Insurance Information Institute puts the usual range at 1% to 5% of the dwelling coverage, and higher in some high-risk coastal areas. Because it is a percentage of the house, not of the roof, it can swallow most of a roof claim.
| Dwelling coverage | 1% | 2% | 5% |
|---|---|---|---|
| $200,000 | $2,000 | $4,000 | $10,000 |
| $300,000 | $3,000 | $6,000 | $15,000 |
| $400,000 | $4,000 | $8,000 | $20,000 |
| $600,000 | $6,000 | $12,000 | $30,000 |
Check the declarations page for two deductibles: the all-other-perils amount (often a flat $1,000 to $2,500) and a wind/hail, named-storm or hurricane deductible. A roof claim from hail uses the wind/hail one.
| Replacement cost value (RCV) | Actual cash value (ACV) | Roof payment schedule | |
|---|---|---|---|
| What it pays | Full cost to replace, less the deductible | Replacement cost less depreciation, less the deductible | A set percentage of replacement cost for the roof's age and material, less the deductible |
| Payments | Two: actual cash value first, the held-back depreciation after the work | One | One |
| Older roof | Pays nearly in full once you replace it | Pays a fraction | Pays the scheduled percentage, falling each year |
| Where you see it | Standard on many HO 3 policies for newer roofs | Common on older roofs, rentals and lower-premium policies | Endorsements used mainly in hail-prone states |
Two conditions in the standard ISO HO 3 form trip people up. First, replacement cost applies only if the home is insured for at least 80% of its replacement cost at the time of loss; below that the settlement drops toward actual cash value. Second, the insurer pays no more than actual cash value until the repair or replacement is complete, and you have 180 days after the loss to tell them you intend to claim the additional replacement cost. Your policy may differ; the loss settlement condition is where to look.
A like-for-like estimate prices the roof you had. A re-roof has to meet the code in force now, which can add items the old roof did not have: drip edge at eaves and rakes (IRC R905.2.8.5), ice barrier where there is a history of ice damming (IRC R905.1.2), replacement of damaged or undersized decking, and extra ventilation where the local code requires it. Those increased costs are paid from ordinance or law coverage, not from the main dwelling limit, and only up to its limit.
If the damage costs less than the deductible, a claim pays nothing. If it costs only a little more, the payout may not be worth the record: claims are reported to the C.L.U.E. property database, which insurers check at renewal and when you buy a policy, and a consumer report lists up to seven years of claims. Get a repair price first, run it through the calculator, and if the payout is small compare it with paying the repair yourself.
Short of money for the difference? The roof financing calculator shows the monthly cost of the out-of-pocket amount, and the roofing financing options guide compares the ways to pay it.
Replacement cost minus your deductible on a replacement cost policy, paid in two parts; replacement cost minus depreciation minus the deductible on an actual cash value policy. On a $16,000 roof that is 12 years old, with a 2% deductible on $300,000 of dwelling coverage, that is $10,000 on a replacement cost policy and $2,320 on an actual cash value policy.
It is the percentage times your dwelling coverage (Coverage A), not times the claim. A 2% wind/hail deductible on a $300,000 home is $6,000, whatever the roof costs. The Insurance Information Institute puts the usual range at 1% to 5%.
After the work is finished and you send the insurer the final invoice, on a replacement cost policy. The standard ISO HO 3 form gives you 180 days after the loss to tell the insurer you intend to claim it. On an actual cash value policy there is no second payment.
Only through ordinance or law coverage, up to its limit. The standard ISO HO 3 form includes 10% of the dwelling limit for it as an additional coverage; check your declarations page. Ask the contractor to list code items, such as drip edge or ice barrier, separately.
No. The deductible is your share under the policy, and several states make waiving or rebating it illegal for contractors, Texas among them (Business and Commerce Code §27.02). An estimate inflated to cover the deductible is insurance fraud.
No. It applies a standard straight-line method so you can check the insurer's worksheet and see what drives it. The carrier's own depreciation tables, endorsements and your state's rules decide the actual settlement.
Reviewed . Educational information, not insurance or legal advice: your policy wording, your carrier's schedules and your state's rules decide a real claim.
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.