Roof claim at actual cash value: what an older roof is paid
A $16,000 roof that is 12 years into a 25-year life is paid $5,820 at actual cash value after a $2,500 deductible, against $13,500 at replacement cost.
Independent site, not an insurer or a broker. ZIP code figures are the Treasury's for 2018 to 2022.
Example, not your result yet· change a figure to see yours
Actual cash value settlement
$5,820
Replacement cost settlement: $13,500. The difference is $7,680.
| Value left in the roof | 52% |
| Depreciated roof value before deductible | $8,320 |
| Replacement cost before deductible | $16,000 |
Straight-line depreciation over the expected life; insurers use their own schedules, and some pay the withheld depreciation once the work is done.
Compiled by Radif Partners · Where the numbers come from · Treasury FIO data, BLS indexes and the texts cited below · not a quote
More and more homeowners policies settle the roof at actual cash value, the cost to replace it minus depreciation for its age, instead of replacement cost. The difference is large on an older roof. Take a roof that would cost $16,000 to replace, with a 25-year expected life, and a $2,500 deductible. At replacement cost the claim pays $13,500. At actual cash value, 12 years in, about half its value is gone and the claim pays $5,820, leaving a gap of $7,680. At 20 years it pays almost nothing. Roof claims weigh most where hail is frequent: the Treasury file counts 10.5 paid claims per 100 policies a year in Louisiana and 8.1 in South Dakota, against 4.5 in the median ZIP code. The calculator uses straight-line depreciation; your insurer may use its own schedule, printed in the policy or an endorsement.
Two ways to settle a roof
Replacement cost pays what it costs to put on a new roof of like kind and quality, less the deductible. Actual cash value pays the replacement cost minus depreciation, the share of the roof's useful life already used, less the deductible. Many standard policies pay replacement cost on the dwelling but allow an endorsement, sometimes called a roof surfacing payment schedule, that switches the roof alone to actual cash value or to a schedule by age and material. Insurers have used these endorsements more as hail claims have grown, and some will only write an older roof on those terms.
| Age of roof | Value left | Paid at replacement cost | Paid at actual cash value |
|---|---|---|---|
| 5 years | 80% | $13,500 | $10,300 |
| 10 years | 60% | $13,500 | $7,100 |
| 15 years | 40% | $13,500 | $3,900 |
| 20 years | 20% | $13,500 | $700 |
| 25 years | 0% | $13,500 | $0 |
The table shows why the age of the roof is often the first question an insurer asks. Past the middle of its life, an actual cash value roof pays less than half of the replacement cost, and near the end the deductible takes everything.
Your roof: age, cost and deductible
Example, not your result yet· change a figure to see yours
Actual cash value settlement
$5,820
| Value left in the roof | 52% |
| Depreciated roof value before deductible | $8,320 |
| Replacement cost before deductible | $16,000 |
Where roof claims are most frequent
The Treasury file does not split claims by cause, but the states with the most paid claims per policy are the hail states. Over 2018 to 2022, Louisiana (10.5), Arkansas (8.2), South Dakota (8.1), Nebraska (7.4), Florida (7.2) had the highest median rates per 100 policies a year. Single bad years stand out: South Dakota went to 9.3 claims per 100 policies in 2022 and Minnesota to 8.6, against 4.2 and 4 the year before. Nebraska's paid loss ratio that year was 42%, up from 26%. Those are the markets where roof schedules and percentage wind and hail deductibles spread first.
What sets the expected life
The depreciation depends on the life the insurer gives the material. Three-tab asphalt shingles are often given about 20 years, architectural shingles 25 to 30, metal and tile much longer, and wood shakes less in wildfire and hail country. A roof schedule endorsement may skip the arithmetic and print a percentage by age band: for example full payment up to ten years, then a falling share. The calculator lets you enter the life your policy uses. If the policy is silent, the adjuster's estimate will state the depreciation applied, and you can ask how it was set and dispute it with a roofer's report on the real condition of the roof.
The deductible on top
Depreciation and deductible stack. Where a percentage wind and hail deductible applies, 1 or 2 percent of the dwelling limit, the deductible on a $350,000 house is $3,500 to $7,000, and an older roof on actual cash value can be worth less than that. The hurricane and wind deductible page shows how those percentages work.
Recoverable depreciation
A replacement cost policy often pays in two steps. First the actual cash value, then the withheld depreciation once the roof has been replaced and the invoice sent, usually within a time limit stated in the policy. That is different from an actual cash value roof, where the depreciation is never paid. Read the loss settlement section: the words "recoverable depreciation" or "holdback" mean the first case. If you do not replace the roof, a replacement cost policy will usually pay only the actual cash value.
Cosmetic damage and matching
Some endorsements exclude cosmetic hail damage to metal roofs, dents that do not let water in. Others limit what the insurer owes when undamaged parts of the roof no longer match the repaired section. These clauses vary by insurer and state, and they can matter more than depreciation after a hailstorm. Ask for them in writing when you compare quotes.
Deciding what to do with an older roof
An old roof on actual cash value is close to uninsured for wind and hail, so the choice is between replacing it, which often lowers the premium and restores replacement cost, or setting money aside for the gap. In Colorado, where hail claims are common, a newer impact-resistant roof can also earn a discount with many insurers. If the insurer will not renew because of the roof, the nonrenewal page explains your notice rights, and the claim calculator helps decide whether a small roof repair is worth a claim at all. For the cost of the work itself, ask two roofers for written estimates.