Replacement cost value (RCV) coverage pays what it costs to put a new roof on today, minus your deductible. Actual cash value (ACV) coverage subtracts depreciation for the roof’s age and condition first, so the older the roof, the less you get. On a hail-damaged Colorado roof, that difference can be most of the check, and many homeowners only learn which one they have after a storm. This page shows how to tell, what each pays, and what changed in 2026.
This is general information about how these policies usually work, not legal advice. Your policy wording controls.
The short answer, side by side
| Replacement cost (RCV) | Actual cash value (ACV) | |
|---|---|---|
| What it pays for the roof | Cost of a comparable new roof, minus the deductible | Replacement cost minus depreciation, minus the deductible |
| Does roof age matter? | Not to the final amount | Yes, every year lowers the payment |
| How it is paid | Usually two checks: ACV first, then the withheld depreciation once the work is done | One payment; depreciation is not paid back |
| Premium | Higher | Lower |
| Who it suits | Most homeowners in hail counties | Homeowners who accept a large share of a future roof bill to lower the premium |
What the difference looks like in dollars
The Texas Department of Insurance publishes a clean worked example, and the math is identical in Colorado. A home insured for $200,000 has a 2 percent deductible ($4,000), and a storm ruins a roof that costs $10,000 to replace:
| Roof age | Replacement cost policy pays | Actual cash value policy pays |
|---|---|---|
| 5 years (ACV $8,500) | $6,000 | $4,500 |
| 10 years (ACV $7,000) | $6,000 | $3,000 |
| 20 years (ACV $4,000) | $6,000 | $0 |
The figures are TDI’s illustration, not a Colorado price. The pattern is what matters: on an ACV roof, a percentage deductible plus depreciation can wipe out the claim on an older roof. Many Colorado policies now carry a wind and hail deductible set as a percentage of the home’s coverage, often 1, 2 or 5 percent, which makes the gap larger here than on a flat deductible.
Three ways your roof can end up at ACV
- The whole policy is ACV. Less common on owner-occupied homes, and the declarations page says so in the loss settlement line.
- A roof-only ACV endorsement. The house is replacement cost, but “roof surfacing” damaged by wind or hail is settled at actual cash value. Some forms switch to ACV only after the roof passes a set age.
- A roof payment schedule. Instead of an adjuster’s depreciation estimate, the policy pays a fixed percentage of replacement cost that drops as the roof ages. The policy can still be advertised as replacement cost.
A fourth clause often travels with these: a cosmetic damage exclusion, which removes coverage for dents and marks that do not let water in. On a metal or stone-coated steel roof, that can matter more than ACV.
Colorado rules that apply
- You can get your full policy in three business days. C.R.S. 10-4-110.8(10) requires the insurer to send a copy of the policy, with the declarations page and endorsements, within three business days of your request, or a certified copy within thirty days.
- Extended replacement cost must be offered. Before issuing or renewing a replacement cost homeowners policy, the insurer has to offer extended replacement cost and law and ordinance coverage, with an explanation of what they cost (C.R.S. 10-4-110.8(6)).
- No double deduction for overhead and profit. Division of Insurance Bulletin B-5.1 says that when a replacement cost policy pays actual cash value because the home is not repaired, the insurer should deduct depreciation but not contractor overhead and profit on top of it.
- Time to collect depreciation. After a total loss, the statute gives you at least 365 days after additional living expense ends to replace property and receive recoverable depreciation. On a hail or wind claim, the deadline comes from your policy. Our guide on losing recoverable depreciation covers the common traps.
What changed in 2026
- Mortgage rules. On March 18, 2026, the FHFA announced that Fannie Mae and Freddie Mac will accept ACV coverage on roofs for single-family homes and condos. Lenders used to push for replacement cost on the whole home; that pressure is gone for the roof.
- Colorado’s resilient roof program. SB26-155, signed June 4, 2026, created the Strengthen Colorado Homes Enterprise in the Division of Insurance. Most of its fee revenue goes to grants for hail- and wind-resistant roofs, and once rules are adopted (no sooner than January 1, 2027), insurers must report the discounts they give for resilient roofs. There is no federal tax credit for a roof in 2026; see roof replacement tax credits.
Before you renew or file a claim
- Request the full policy with every endorsement in writing.
- Find the loss settlement terms for the dwelling and, separately, for roof surfacing.
- Look for a roof payment schedule, a roof age trigger, and a cosmetic damage exclusion.
- Ask your agent to quote the same policy with full replacement cost on the roof, and get the premium difference per year in writing.
- Ask what discount a UL 2218 Class 4 roof earns; see is a Class 4 shingle roof worth it?
If you already have a claim, our guide to reading your claim summary explains where ACV, depreciation and the deductible show up.
Where we fit
We are roofers, not adjusters. The claim and the policy stay yours. What we do is document the roof: every slope photographed, the hail hits marked, the roof’s age and layers noted, so the scope reflects the real damage and we make sure nothing gets missed in the scope. Integrity Roofing and Painting is veteran-owned and family-run since 1990, an Owens Corning Platinum Preferred contractor with 650+ Google reviews. Book a free Colorado Springs roof inspection or call (719) 488-2800; we respond the same business day. In the Denver area, use our free Denver roof inspection page.
Sources: Texas Department of Insurance, Home policies: replacement cost or actual cash value?; Colorado Division of Insurance, Bulletin B-5.1 (effective 5/8/2007); C.R.S. 10-4-110.8 (unofficial reproduction); FHFA news release, March 18, 2026; SB26-155, Colorado General Assembly.
