How to read your insurance estimate: ACV vs. RCV, explained

When a claim estimate lands in your inbox, it's full of line items, codes, and two terms that quietly control the entire outcome: ACV and RCV. Understanding them before you sign anything changes how much of the repair you end up paying for.

RCV: what it actually costs to replace it today

Replacement Cost Value is the full price to repair or rebuild the damaged item with materials of similar kind and quality, at today's prices — labor, materials, permits, everything.

ACV: RCV minus depreciation

Actual Cash Value takes that same RCV number and subtracts depreciation for the age and condition of what was damaged. A 12-year-old shingle roof might be depreciated 40–60% before you ever see a check.

Why the gap matters

If your policy pays ACV only, the insurer cuts a check for the depreciated amount — you cover the difference out of pocket, or you don't complete the repair. If your policy is Replacement Cost, you're typically paid the ACV amount first, then the remaining depreciation ("recoverable depreciation") once the work is completed and documented — which is exactly why finishing the repair, and finishing it with proper documentation, is what unlocks the rest of your payout.

Where a contractor actually helps

A contractor who's handled hundreds of these knows which line items adjusters routinely under-scope — code-required upgrades, matching material on an undamaged slope, disposal fees — and how to document supplemental costs so the second check reflects the real job, not just the first estimate.

Before you accept a first offer, get a second, independent estimate from a licensed contractor who will walk the adjuster's scope line by line with you. It costs nothing to ask, and it's the single biggest lever on what you actually collect.