Roof Claims Explained: ACV vs Replacement Cost Coverage

Are you experiencing damage to your roof because of wind or hail? Homeowners insurance companies often have confusing rules about these kinds of claims so we created a video that walks you through the process.
We'll explain the possible coverage options and break down an example claim scenario. When the video is complete, you'll have a great idea of what to expect from your insurance company when dealing with a roof claim.
Here are some highlights:
WHY DO INSURANCE COMPANIES HAVE DIFFERENT RULES FOR YOUR ROOF?
More than 40% of all homeowner’s insurance claims involve wind damage or hail damage to the exterior of a home. The vast majority of those claims involve the roof.
That means insurance companies are motivated to limit their risk with specific coverage options for your roof. So they’ve created a completely separate name for the kind of damage that usually happens to your roof - Wind/Hail Coverage
PEOPLE INVOLVED IN A ROOF CLAIM
1. You - Obviously
2. Roofing Contractor - The people that fix your roof
3. Insurance Adjuster - The insurance company representative that makes decisions and cuts checks
STEPS IN A ROOF CLAIM
1. Get an estimate from a reputable, local roofer
2. File an insurance claim
3. Meet with Insurance adjuster
TYPES OF WIND/HAIL COVERAGE
1. None At All
2. ACV Coverage - Pays less if your roof is older
3. Replacement Cost Coverage - Pays the cost of replacing your roof minus your deductible
ROOKIE MISTAKE
Being Mean to the Insurance Adjuster
_______________________________________
Learn more about us at:
Our Site - www.shineinsurance.com
Our Blog - www.shineinsure.com/blog
Our Podcast - www.scratchentrepreneur.com
Our New Home Buyers Course: www.newhomebuyersguide.net

[@Eltravieso71198]

We are newbies at roof claims/replacements-this video was amazing! Really laid things out in easy to understand terms. Thank you!

[@Aileensjournal]

We just had new roof waiting for second check , you got it right .

[@ebt-evolutionbasketballtra9119]

Congratulations to you. A very simple and informative video that can help explain to homeowners the steps of the claim process in an easy to understand way. Very nice and helpful to many homeowners.

[@ShineInsurance]

Thanks Orlando, glad it helped. Let us know what else you like us to create a video on.

[@Nana-vx6mt]

Absolutely 🤗

[@Brascobadboy]

Know it all owners wanting estimates

[@shawntadesse1866]

Very educational. You have answered All of my questions. Thanks a bunch!!

[@Lasereyeswolf-Travel]

Amazing video. So clear to understand!

[@nickwilkinson8171]

Best explanation i have seen. Great job!

[@ShineInsurance]

Thanks Nick, glad it helped.

[@marieg5300]

Thank you so much for your upload of your video educating the consumer something sometimes we may not understand the language regarding Insurance claim and I appreciate your time and your video thank

[@ShineInsurance]

Thank you Marie, we're happy to :)

[@yamato7979]

You gave great information about insurance and how financial process works on roof repair. Thumb 👍

[@feliciarenee5784]

So very helpful! Love this video! 🙂👏👏👏

[@earhustler2639]

Hello! Thank you for this priceless information. I just moved into my home after living in apartments for years. It’s a different animal. But your video has made this ceiling leak a tameable experience. I just subscribed to your channel. I will be watching the other videos also. Thanks again!

[@ShineInsurance]

Ear Hustler really glad to hear it. Did your insurance company take good care of you?

[@bigx94]

Great video of explaining the insurance SCAM!

[@arael13]

Well done man well done. Thanks for the info .

[@ShineInsurance]

YAY!! Glad it was helpful.

[@flyingjournal]

thank you for this very helpful video!!

[@fredycarabali27]

Well done , excellent Job. thank you.

[@ShineInsurance]

Fredy Carabali , glad it was helpful!

[@pardeepmanda4762]

Nicely explained

[@freznostate]

Well my job as a contractor is to be pretty much the home owner and we make sure that the adjuster takes the photos he's/she's suppose to take pictures of aka the damage that I found when I do my free inspection. That way he doesn't get his bonus at the end of the year. Hes bonus is achieved by not approving a certain amount of damage. I have my clients best interest in heart. I which is why the customer doesn't have to stress about anything

[@FoxBuisness]

Now that’s a Hard Pitch ✍️📄⛈⛈⛈⛈⛈

[@petuniaromania6294]

Hi there. Do you have a video addressing insurance strategies for anticipated, or occurring, sea-level rise?

[@ShineInsurance]

No we don't. To my knowledge, insurance companies haven't identified it as insurable against. If rising sea levels affected a community it, of course, would be catastrophic. Generally, insurance companies actually steer clear of covering incredibly catastrophic things. The reason is that if they happen, the insurance company would go bankrupt from too many claims.

[@hustlindaddiy5194]

Great video. How do you know if you have ACV or replacement? Is it the all perils at the beginning of the document? I don’t see it called out specifically anywhere. Thanks.

[@ShineInsurance]

Great question. It is often hidden. If you don't see anything obvious, ask your insurance agent to confirm in writing that you have replacement cost coverage for your roof.

[@jlanglais68]

On average how long should this process take from the time you file the claim till the insurance company issues you your 1st check?

[@RyanTruongChannel]

Thank you!

[@aacar4095]

So if your insurance pays O&P for multiple trade damages, and you personally act as the GC (you're not licensed or anything, just regular homeowner) can you get paid the full amount or do they only pay "final cost submitted by contractor" - "ACV" = "your final check from insurer"? That is, bottom line, if you have your roof replaced you'll never receive any extra $ as the homeowner (unless you just took the ACV payment and didn't replace the roof (or if you did it the replacement yourself somehow)), correct?

[@salsamink]

How many years does the roof have to be for them to only consider ACV coverage?

[@Nana-vx6mt]

This was as a very very good video.

[@everydayrestoration5193]

I work for a roofing contractor & we wanted to be sure that it’s the homeowners that have the insurance, we can’t obtain an insurer who would do this for all of our companies work can we? And what is the process for the contractors on this subject...?

[@kathymimms5545]

So helpful

[@ShineInsurance]

We appreciate you!

[@katiek1856]

Whew! I have hail coverage and replacement cost on my policy. Just saved about $15k.

[@cosmicpowwow]

he he "frozen ice balls"....frozen rain falling or ice balls falling? thanks for the info! this helped me out alot.

[@TheCypresstree1]

My policy has replacement cost but then has age of roof right below it?

[@carlosrios9169]

Well i am a sales rep/ consultant for a construction company that specializes in roof insurance claims n we dnt disappear n we absolutely always use the best product selected by the homeowner so dnt say that we are not to be trusted because not everyone is as shady as u think

[@ShineInsurance]

Carlos Rios glad to hear it! As we mention in the video there are great roofers out there. Sounds like you’re one of them.

[@st77tx99]

Between the ACV and RCV policies, RCV premiums are more expensive right, but which one has a higher deductible?

[@ShineInsurance]

Great question! ACV versus RCV is about how the claim payout will be figured. Will they pay the total cost of replacing a damaged item (RCV) or will they reduce the payment based on how old the item is (ACV). The deductible is a separate decision. This is what you agree to subtract from the claim pay out no matter how it was figured. The deductible is subtracted after the ACV or RCV claim payout is figured. Hope that helps.

[@jeanrobinson2948]

If the total repairs are less than the first check amount for ACV are you still able to access the replacement cost benefits? or do you have to show receipts totaling more than the ACV claim payout to get additional benefits.

[@ShineInsurance]

Great question! Given this scenario, the second check would not be cut. The first check would be proven to have covered the Replacement Cost and not the originally considered ACV.

[@damianmlegacy7311]

Can I use this video on my website. How can I get approval?

[@carlosperalta708]

Great video, I was affected for hurricane Ian and now my insure wants to replace my whole roof which I think is excessive since I'm only missing a couple of shingles... They will pay a company directly to replace the roof. How will that affect me and my record? Thanka in advance.

[@carlosperalta708]

Just to clarify, I want to know how that's going to affect my next premium?, I'm sure they will increase it dramatically.

[@ShineInsurance]

@@carlosperalta708 First off, sorry you're dealing with Hurricane Ian. Sounds like you were fairly fortunate. You don't ever have to take the payment in a claim scenario. If you do choose not to replace the roof, it may be a good idea not to take any money at all. That would potentially show as a $0 claim which many companies don't increase premium for. However, rates are going to go up in your area regardless. The fallout from Ian will be felt in insurance renewals for years to come. So it's hard to argue against taking what they are offering. The effect of a claim on your premium depends on the company but generally, a $2000 claim and a $15000 claim have a similar effect. With some companies, even a $0 claim will have an effect. You can ask you insurance advisor to give you a more clear answer but even they don't know. Future premium decisions haven't been made yet so they basically have to guess as well. You clearly are a more honorable human than most out there. So kuddos to you for that. But this may be one where you take what's being offered. The pros likely outweigh the cons.

[@Chruch14]

Could you explain the process if you do the work your self as a homeowner?

[@ShineInsurance]

It's important to talk this through with the insurance company claim adjuster. It is common for you to receive compensation for time spent both you just want to be very clear on how your insurance company handles that.

[@mandy1927]

I don't see wind/hail coverage on my policy anywhere. I have dwelling protection without Building Structure Reimbursement Extended Limits then it says all peril next to my deductible amount. My roof is older but just got some wind damage 4 days ago. People got me having an anxiety attack about calling my insurance. Now I worry I waited to late since I didn't call the day it happened. And with this covid-19 pandemic will they even come out and deal with my claim?

[@ShineInsurance]

Hey Mandy, don't worry that you didn't call on the same day. Give them a buzz today. That will be fine. As for Wind-Hail coverage, it would be best if you saw it on your policy but some policies don't lay it out very clearly. Ask you insurance agent if you have wind-hail coverage. They should be able to give you a clear answer about Wind-Hail coverage and whether your coverage is ACV or Replacement Cost. Those will be important factors in your claim.

[@prettybrowneyez3338]

Cool. I have RCV. But recoverable depreciation was deducted as well as the deductible. What is that?

[@ShineInsurance]

This is a common step even with an RCV policy. The first check from the insurance company is based on an ACV valuation. Once you do the work and submit the final invoice to the insurance company they will cut a check for the additional funds.

[@prettybrowneyez3338]

@@ShineInsurance Thank you. Loved the very informative video.

[@MonicaHernandez-pl4jv]

So if i have ACV and the depreciation was deducted, will i be getting that check too?

[@shariffmdmalimdm]

Can you please help me in understanding the word ACV Better? Does it mean the amount which we can get by selling the damaged roof?

[@ShineInsurance]

ACV is an acronym for Actual Cash Value. This term is more easily understood when thinking about cars. If you own a 2007 Toyota Tacoma you could sell for much less than a 2020 Toyota Tacoma. What you could sell a car for is it's Actual Cash Value. In an insurance claim the company isn't going to pay to replace a damaged 2007 truck with a 2020 truck. That makes total sense right? But the terms ACV has been brought over to properties where it makes slightly less sense. Same concept though. You have a damaged roof. It's 10 years old. With ACV coverage they will depreciate for age (just like that truck). THE BIG DIFFERENCE is that you can't go out and buy a 10 year old roof to replace the damaged one. You have to by a brand new roof. That's why Replacement Cost coverage is better than ACV. It will pay the cost to replace NOT the depreciated Actual Cash Value. Hope that helps

[@shariffmdmalimdm]

@@ShineInsurance thanks for the detailed explanation :)

[@A5hunter]

Mine says replacement cost value, is that the same thing as replacement cost coverage?

[@ShineInsurance]

Yes, RCV is the type of coverage you want. It's the same thing. Great job getting smart roof coverage!

[@omarsroofing414]

Yes your good to go.

[@qianruyang7341]

Like this video. But in my case, I was nice to the adjuster, but he is mean to me. My home insurance company, Liberty Mutual insisted on that my 30-yr old roof still has shingles flexible enough to repair. My roof contractor is from a well-known local roof company and said my roof need to be replaced. But the insurance company said their brittle test showed the shingles were flexible, and blamed me that I did not find a good roof contractor. What should I do in this case?

[@ShineInsurance]

This stinks! You could: 1. Get a second roofer opinion. If they agree with the first, present to the company. 2. Have a roofer that is well versed in insurance contact the adjuster and talk it out. 3. Hire a public adjuster- Be VERY careful here. This will grind the process to a halt for months but... it is the official way to debate an insurance company. 4. Lick your wounds and keep on trucking. All are viable. Best of luck to you!

[@trauden7684]

What if the insurance say the damage is not caused by wind or hail? We have an older home with tar flat roof. Recently have a snow storm and water is coming in the day after from snow sitting on the roof. Not sure if it's worth filing a claim if they will deny that it's not cause by wind or hail.

[@jeremygoodrich1459]

The only way to really know s to file the claim. But it is important to understand: If damage is caused by your roof just getting old, that is not covered by insurance. That is just the maintenance cost of owning a house. I had to put a new roof on our house recently. $10k! My roof was just old so I had to do it. Does that help?

[@trauden7684]

Thanks. I haven't contacted them yet but wondering how wind and hail damage can apply for my case. We just had a snow storm

[@darrenw.taylor2084]

I have Personal Property Replacement Coverage. Is that the same as replacement cost coverage?

[@ShineInsurance]

If your policy has replacement cost coverage for your personal property it probably has it for the actual house as well. They are two different things though. Imagine turning your house upside down and shaking it. The things that fall out are your personal property. The things that don't are your house.

[@insuranceclaimspractitione2290]

Darren W. Taylor Darren you also want to make sure you policy includes O&L building code endorsement which cover any cost associated with bringing you dwelling up to current minimum building code standards if you ever have to file a claim for a peril loss. Like replacing your roof due to wind or hail damages.

[@zreece09]

Do you typically see the ACV check handed over to the roofer prior to the roofer beginning the work? Thanks for the great video!

[@ShineInsurance]

Great question. Companies definitely differ on this one. The size of the check matters too. The ACV check is often written to the named insured AND the mortgage company. So you, the named insured, have to work with your mortgage company to release the funds. If the check is under $5000, the insurance company may write it to the named insured without including the mortgage company. Some companies may write it directly to preferred roofing companies that are a part of their service network. Fewer and fewer do this though as they are trying to protect clients from fly-by-night roofers. Does this help?

[@zreece09]

Thanks! Would you say one practice is more common than the other? I don’t want to alarm customers but as an operator/contractor I’d obviously rather collect the check prior to paying for materials.

[@ShineInsurance]

Definitely understand where you're coming from on that one. Our experience is that smaller roofing contractors often have to struggle with this issue. If you're a local roofer with a solid reputation you might call a couple of insurance companies and try to get on their preferred provider lists. Really though, the majority of roofers acquire materials before getting paid.

[@insuranceclaimspractitione2290]

Zach Reece Yes, before you hand over the ACV check to contractor make sure the contractor you hired has general liability and workers comp insurance policy.

[@thezohan1960]

Question. So if the deductible is $1k and its supposed to cost $8k and at the end it only cost $6k.. do i keep my $1k plus the insurance $1k?

[@jayjay269]

The Zohan It all depends. Typically, once you’ve gotten an estimate of the cost and your insurance adjuster gives you the green light to get it replaced, they will cut a check to the contractor for the actual cost to repair your roof. There isn’t really a way for you to get anything (remaining money) from them once the process starts. You pay your deductible and your insurance pays the rest.

[@insuranceclaimspractitione2290]

The Zohan Hey Zohan you pay your premium each month to cover the replacement cost value to replace a damage peril loss. For example your roof has hail damage. The adjuster apply cover for a full roof replacement of your roof. You want to hire a contractor that will replace the roof for the replacement cost value your insurance company approves. Example. Adjuster approved 10K (RCV) to make you whole again before the hail damage. Your contractor will do the work for 10K plus any supplement items the adjuster did not include that is omitted, missed, deleted, or building code upgrade items. Make sure your policy has O&L building code endorsement added to your policy. You will pay your contractor your deductible amount 1K. And the remaining balance your insurance company will pay.

[@nomadicrecovery1586]

No. The insurance only owes for what is damaged, you cannot, by law, profit in any way.

[@Shabba-lo6qs]

So my insurance cut me a check under my wife’s and my name how do I get the contractor to show me the estimate prior to just forking over all the money?? It’s way more than we expected to get and we have a smaller home and i doubt it takes that much to complete the roof??

[@ShineInsurance]

Great question. A roofer should provide a clear estimate of cost before asking your to sign a work order. If they aren't able to do that or explain their process to your satisfaction, find another local reputable roofer to do the work. Don't hire anyone who doesn't have a long standing local reputation. Hope this helps.

[@jvhamby5]

Big Shabba insurance fraud is not paying the roofer the total amount provided by the insurance company. The point is there is an xactimate estimate involving the costs at fair market value provided by the insurance adjuster in most cases.

[@omarsroofing414]

Big Shabba if that’s what insurance. Is paying than that’s what is worth. You keeping money in my state would be insurance fraud: good luck

[@cody33853]

Insurance company’s are crooked. Don’t ever have an insurance adjuster on the property by themselves. They will cheat you in every fucking way. Make sure your contractor is there holding them accountable.

[@Kadenld]

The adjuster almost never agrees with the contractor, with the exception if there’s obvious damage. Incredibly some adjusters actually get bones based on the amount of claims they deny.

[@lalokullo]

Why do I have to give the deductible to the roofer? Isn't that going to the insurance company?

[@ShineInsurance]

The insurance company is simply going to pay the claim minus the deductible. Which means the insurance company check will be short of what you owe for the work that was done. Does that make sense?

[@lronbutters5688]

Ty

[@goosecouple]

VG

[@amazingstrength9794]

And roof inspections are almost always free

[@omarsroofing414]

Make sure you use a company that has in house guys .not companies that use sub contractors..why because subcontractors only want to get things done quick and cut corners

[@jasonpatrickries]

What are in house guys?

[@the40yogamer]

I have a question for you our insurance approved our claim to replace our roof after we got wind damage a few days later we got a letter in the mail saying they will no longer cover us after Jan 20th a lot of houses got damaged from the wind storm here so the roofers are all backed up intel after February our bank loan requires we have insurance will another insurance company cover us with a damaged roof if we show we are under contract to get the roof replaced but are just waiting for the roofers to get to it?

[@ShineInsurance]

Hey Gamer, well it sucks that an insurance company cancels you like that. Really makes you feel special doesn't it... Good news though: 1: Insurance applies according to the day the bad thing happened. So even if they cancel today, they would have to complete the process of your claim. So no worries there. I'd go ahead and start looking for new insurance to replace yours when it expires. Go find an Independent Insurance Agent in your town. They'll be able to help.

[@the40yogamer]

@@ShineInsurance ok thanks so even know the roof won't be fixed by the time our insurance expires there are insurance companies that will still insure us if we show we are putting a new roof on the house? we are worried no one will want to insure a house with a damaged roof

[@ShineInsurance]

@@the40yogamer , yes. Chat with an independent agent. If you have issues, give us a buzz.

[@the40yogamer]

@@ShineInsurance ok thanks I appreciate the info very much gives me peace of mind until I can get in touch with an agent

[@jeremygoodrich1459]

@@the40yogamer always happy to help!

[@EmilyBeanz]

This video was great. Can you imagine the flood of claims if the nagging uncle was covered? LOL Dear god...

[@Brascobadboy]

Deductibles matter

[@Brascobadboy]

Know it all Owners want ten Estimates. Estimates mean nothin.

[@ShineInsurance]

Totally. With 10 estimates they will definitely know it all!

[@ThanksAgain]

His "Pro tips" are lobbying for the insurance industry. Be nice to the adjuster? Like you have to beg to get fair deal you paid to get. That is corruption, which is why people are sick of getting robbed by smooth taking insurance stooges.

[@ShineInsurance]

Hmm. Helping folks navigate a claim in the way that's gonna benefit them the most is lobbying? So we should just not help people at all? That's pretty silly. Thanks for watching though.

[@ThanksAgain]

@@ShineInsurance nobody should need to "navigate a claim" and smooze an agent or adjuster to get paid according to a contract that they have held up-- claims require layers of Red tape. It's been a shame and a sham for decades.

[@insuranceclaimguy]

No mention of a public adjuster? A PA is licensed by the state ins dept to represent homeowners. A PA's job is to help the homeowner file the claim present the damage properly and negotiate on behalf of the homeowner. Why would you not talk about the PA to go against the insurance adjuster. Roofer is not a claims adjuster and not proper help with a claim.

[@kimla4807]

I recently got paid by ACV instead of RCV. Call insurance n ask them why I got ACV n he said I got RCV policy but when I recently claim n my roof was over 15 years old. He said roof was over 15 years old will get ACV checks. He said if I file before 15 years I would get RCV check. Is that true???

[@accsportsfan]

What did they say in the paper for the insurance ? Do they say it there replacement for entire roof? Sorry for my English. My English is limited. I’m just a widow a couple months ago.

[@stevenevangelist5221]

was told hail had to be 3/4 inches or larger to qualify for the claim.

[@chrisjeffery7611]

And we all had a Drunk Uncle

[@ShineInsurance]

Our team has analyzed this comment, read it backwards and forwards, dissected it for connections with the Illuminati and we are simply stumped. When we asked the token Shine Insurance drunk uncle, he said he understood so there's that.

[@DaggeroftheMind]

"Does not include your drunk uncle talking politics" from the wind coverage segment. That's what his comment was about.

[@ashleyhembree1281]

Crock of carp way to give us food reps a bad name I happen to be one and it's how I feed my family and I've never done a half ass job and I've done over 300 roofs in my City

[@ShineInsurance]

Hey Ashley, glad you're doing a great honest job out there. There are lots of fantastic roofers. Others though, they're just plain fishy.

[@tentons123]

I need to submit a claim for all that hot air in the first half of the video.

[@mattfrederick3970]

Instead of bad mouthing non local storm chasers, how about you say choose a quality contractor with a proven track record. We use the best products and have written over 30 million dollars of storm damage, most of which is 3-5 hours from our office.

[@ShineInsurance]

Definitely a quality local contractor with a track record in your area. If you're a large roofing contractor with a solid presence around your state and a reputation for doing quality work, awesome. If, conversely, you follow hail storms around the country, set up shop, knock on doors promising free roofs, install a terrible roof, and disappear, then you're a big part of the problem. Sounds like you're the former.

[@mattfrederick3970]

@@ShineInsurance once again you assume locally means quality. There are tons of terrible local roofers. And we're not large, averaging 300-500 a year. If you give advice, ensure you're the former. Scamming contractors are an issues in all fields, in all localities. I operate in 6 states and a certified installer for multiple shingle manufacturers. Your biases and can not only harm certain businesses but steer homeowners towards the wrong contractor based on solely on location. Enjoy your soapbox.

[@ShineInsurance]

​@@mattfrederick3970, hmm..seemed like we were in agreement. ...steps back up on soapbox... This video presents two qualities as important: Local & Reputable. Local is included simply because it means the contractor is likely to be find-able if something goes wrong. In all industries, someone who may run into their customers at the grocery store has a built in motivation to serve them better. Doesn't mean that always happens but it's certainly more likely to happen. Reputable is synonymous with quality. If you have 200 reviews online that talk about how responsive & friendly your company is, how well you installed the roof, and how the roof was awesome for years after the install, then you appear to be a reputable roofer. Viewers of this video are smart enough to understand that not all local roofers are reputable and not all reputable roofers are local. We're not forcing anything down anyone's throat. Our advice is simply a rule of thumb learned from walked clients through thousands of roof claims. ..steps down from soapbox...