Two homeowners policies can look identical on price and still pay wildly different amounts on the same claim. The reason is usually two little phrases buried in the policy: replacement cost, or actual cash value.
Pays what it costs to replace the damaged item or rebuild with materials of like kind and quality, at today's prices, without subtracting for age. A ten-year-old roof destroyed by a storm is paid closer to a new roof.
Pays replacement cost minus depreciation. That same ten-year-old roof is paid as a ten-year-old roof — a fraction of a new one. You make up the difference out of pocket. ACV policies are cheaper for a reason.
Roofs, HVAC, and personal property. Some policies quietly write the roof as ACV even when the dwelling is RCV — check your roof settlement terms specifically. See our home & auto page.
ACV lowers your premium but raises what you'll owe after a loss. RCV costs a little more each month and pays far better when it counts. For most homeowners, replacement cost on the dwelling is worth it.
One caution: also check that your dwelling limit reflects today's rebuild costs. Even RCV won't pay past the limit — an underinsured home is its own trap.
Send it to us and we'll read the fine print with you — especially the roof settlement terms.
Start my quote