Roof Replacement Claims: How to Read Your Insurance Claim Document and Key Terms to Know

Have you filed an insurance claim to cover the cost of a new roof? If so, you’re probably wondering how to read and understand your claim document. Insurance claim documents can be confusing, but it’s important to understand them to ensure you are getting the full amount of coverage. Here is a guide about understanding your insurance claim document for a new roof replacement, the different sections of your insurance claim document, common terms that appear, and what they mean.  

1. Why do most insurance claim documents look alike? Most adjusters and insurance companies use the same software, called Xactimate, to process claims. This what they use to calculate the claim amounts.
2. The first page at a glance: The first page of your claim will have your adjuster’s information, the insurance company’s information, and your claim number. Your contact information and policy number will also appear on this page. Most insurance companies include an overview of the damages on this page as well.
3. Looking at the next few pages: The first page has some useful information, but it doesn’t cover the details about the scope of damage or cost. The next pages of your claim contain information about the replacement cost value (RCV), your deductible, depreciation, actual cash value (ACV), recoverable, and non-recoverable depreciation.
4. RCV and ACV: What do they mean? The replacement cost value (RCV) is your insurance company’s estimate of the cost to repair your home. Actual cash value (ACV) is the RCV with your deductible and depreciation subtracted from that amount.
5. Understanding depreciation: Just as cars depreciate in value, roofs do too. To calculate depreciation, your insurance company factors in the age and lifespan of your roof. If you have a 20-year roof, and its current age is 10 years, then your roof is depreciated by 50%.  
6. Recoverable and Non-Recoverable Depreciation: If your policy includes RCV coverage, you should have recoverable depreciation. This is money that will be reimbursed to you after paying for the repairs. If you have ACV coverage, the depreciation will not be recoverable. So, this amount will not be included in your claim. If you only have ACV coverage, you will pay for a larger portion of the repair costs out of pocket.

Understanding your insurance claim document for a new roof replacement is a key part of navigating the homeowners insurance claim process. By reviewing the different sections of your claim document and understanding what they mean, you can identify any potential discrepancies or areas of concern. If you have any questions, give us a call at (719) 487-7663 or contact your insurance company.