ACV vs. Replacement Cost Roof Coverage: Why Reviewing Your Wind & Hail Deductible Matters

Your roof is one of the most important parts of your home—and one of the most expensive to replace. When storms bring wind or hail damage, the type of homeowners insurance roof coverage you have can make a massive difference in how much money comes out of your pocket. 

Many homeowners are surprised to learn that their policy may not fully replace their roof after a claim. That’s because insurance companies are making major shifts toward Actual Cash Value (ACV) roof coverage, Replacement Cost (RC) roof coverage limits, and higher wind/hail deductibles. 

If you own a home, understanding the difference between ACV vs RC coverage and flat vs percentage deductibles could save you thousands of dollars. 

What Is the Difference Between ACV and Replacement Cost Roof Coverage?

Actual Cash Value (ACV) Roof Coverage 

• Pays the depreciated value of your roof at the time of loss
• The older your roof, the less you’ll get in a claim payout
• Typically comes with lower premiums but higher out-of-pocket costs

Replacement Cost (RC) Roof Coverage 

• Pays the full cost to replace your roof with new materials of similar kind and quality
• No depreciation deducted
• Usually comes with higher premiums but lower out-of-pocket costs

Example: If your 15-year-old roof is damaged by hail, ACV coverage may only pay a fraction of the replacement cost—leaving you to cover the rest. RC coverage ensures you get a brand-new roof without worrying about depreciation. 

ACV vs Replacement Cost: Pros and Cons for Homeowners

Pros of ACV Coverage 

• Lower premiums, making it more affordable month-to-month
• Easier to qualify for, especially with older roofs or high-risk areas

Cons of ACV Coverage 

• Depreciation reduces payout significantly
• Higher out-of-pocket repair costs after storm damage
• May leave you underinsured in a major loss

Pros of Replacement Cost Coverage 

• Full roof replacement without depreciation
• Better long-term protection for home value
• Greater financial security after a storm or disaster

Cons of Replacement Cost Coverage 

• Higher monthly premiums
• Stricter qualifications (roof condition, maintenance)
• May require policy endorsements for full value

Wind and Hail Deductibles: Flat vs Percentage-Based

One of the most confusing (and costly) changes in homeowners’ insurance is how deductibles work for wind and hail damage. 

Flat Wind/Hail Deductible 

• Set dollar amount, such as $1,000 or $2,500
• Example: $15,000 roof damage – $2,500 deductible = $12,500 insurance payout

Percentage-Based Wind/Hail Deductible 

• Calculated as a percentage of your home’s insured value (Coverage A)
• Example: $400,000 dwelling coverage × 1% = $4,000 deductible
• $15,000 roof damage – $4,000 deductible = $11,000 insurance payout

Percentage-based deductibles are becoming more common across the U.S.—especially in storm-prone states—leading to higher out-of-pocket costs for homeowners. 

Why Are More Insurance Companies Switching to ACV Roof Coverage and Higher Deductibles?

The short answer: weather trends and rising costs. 

• Severe weather is increasing. Wind, hail, and tornadoes are now some of the costliest natural disasters. Between 2022 and 2023, insured losses nearly doubled from $29 billion to $57 billion.
• Roof claims are skyrocketing. In 2024, roof-related insurance claims reached $31 billion, up 30% since 2022.
• Construction costs are climbing. Labor and materials are more expensive, pushing insurers to adjust policies.
• Data-driven underwriting. Carriers now use aerial imagery, satellite data, and AI to evaluate roof condition and age. Homes with older or poorly maintained roofs often qualify only for ACV coverage.
• Percentage-based deductibles spread risk. Instead of flat deductibles, many carriers now apply 1%–2% wind/hail deductibles (and sometimes up to 5–7% in high-risk zones).

Why You Should Review Your Homeowners Insurance Policy Annually

Storm season brings uncertainty—but your coverage shouldn’t. Reviewing your policy ensures you’re not caught off guard when damage happens. Here’s why it matters: 

• Roof Age: Older roofs may only qualify for ACV coverage.
• Policy Changes: Insurers often adjust coverage or deductibles at renewal.
• Deductible Awareness: Percentage-based deductibles can mean thousands more out of pocket.
• Replacement Cost Accuracy: Inflation and rising material costs may leave your home underinsured.
• Discount Opportunities: New roofs, impact-resistant shingles, or hurricane straps may lower premiums.
• Storm Preparedness: Reviewing now helps you make repairs, adjust coverage, and avoid claim delays later.

Smart Questions to Ask Your Insurance Advisor

Don’t wait until a storm hits to understand your roof coverage. Ask your advisor: 

1. Do I have Replacement Cost or Actual Cash Value coverage on my roof?
2. Is my wind/hail deductible flat or percentage-based?
3. Are there separate deductibles for hurricanes, wind, or hail?
4. How much would I actually owe if I filed a claim today?
5. What upgrades or improvements could lower my homeowners insurance premium?

FAQs

Q1: What is the difference between ACV and Replacement Cost roof coverage? 
ACV (Actual Cash Value) coverage pays the depreciated value of your roof, meaning you get less money for older roofs. Replacement Cost (RC) coverage pays the full cost to replace your roof with new materials, without depreciation. 

Q2: Why are insurance companies moving toward ACV coverage? 
Due to rising storm damage claims, inflation in construction costs, and advanced roof inspections, insurers are shifting to ACV coverage or higher deductibles to manage risk. 

Q3: What is a percentage-based wind/hail deductible? 
Instead of a flat amount, percentage deductibles are calculated as a percentage of your home’s insured value. For example, 1% of a $400,000 home equals a $4,000 deductible. 

Q4: Which is better—ACV or Replacement Cost coverage? 
RC coverage provides full replacement without depreciation, offering stronger financial protection but with higher premiums. ACV coverage is cheaper but results in higher out-of-pocket costs after a claim. 

Q5: How often should I review my homeowners insurance policy? 
Experts recommend reviewing your policy annually—especially before storm season—to confirm your roof coverage, deductible type, and replacement cost limits are up-to-date. 

Final Thoughts

With roof replacement costs rising and insurers shifting to ACV roof coverage and percentage-based wind/hail deductibles, homeowners need to stay proactive. Reviewing your policy now ensures you’re prepared financially if a storm damages your home. 

At Conner Insurance, our goal is to make sure you have the right coverage to protect your home, your roof, and your wallet. 

Contact us today to review your homeowners insurance and see if your policy offers the right balance of protection and affordability.