How does roof depreciation affect homeowners insurance?

What is roof depreciation?

Roof depreciation is the decline in your roof's condition and value due to age, consistent impactful weather, severe weather, and normal wear and tear. An aging roof means more of a chance for damage from UV exposure, rain, hail, heavy winds, and the weight of snow among other things. If you have an older roof, the cost of homeowners insurance is generally higher because a depreciated roof increases the likelihood of a claim.

How does homeowners insurance cover damage to a depreciated roof?

Your homeowners policy's dwelling coverage may pay to repair or replace your roof due to damage from a covered peril, up to your coverage limit and minus your homeowners deductible. How much your insurer pays for a damaged roof depends on whether you have a policy with replacement cost (RCV) or actual cash value (ACV).

Roof claims with an actual cash value policy

If you have an actual cash value (ACV) policy and file a homeowners insurance claim for a damaged roof, your insurer may pay you for the roof's depreciated value. That means your insurer will issue you a check for what the roof was valued when the covered incident occurred.

Roof claims with a replacement cost value policy

When you have a replacement cost value (RCV) homeowners policy, your insurer may pay for the entire roof replacement if your roof is damaged from a covered peril and is a total loss. That means your roof's depreciation isn't a factor in your claim.

Find out more about how homeowners insurance covers roof damage.

Should you buy a policy with replacement cost value (RCV) or actual cash value (ACV)?

An ACV policy can cost less because insurers will subtract depreciation on claim payouts. Whether or not the savings are worth it is a matter of preference, knowing you may pay more for a potential claim than you would with a replacement cost endorsement.

Ways to minimize roof depreciation

You may be able to slow roof depreciation by doing the following:

• Consistent upkeep: Remove debris, clean gutters, replace damaged shingles, and trim overhanging branches.
• Schedule an inspection: A trusted professional may catch problems early, preventing costly damage in the future, such as a leaky roof.
• Choose a durable roof material: High-quality, impact-resistant materials can preserve your roof's value and extend its lifespan. According to HomeAdvisor.com, metal roofs can last 40 to 70 years or more, with proper maintenance. Find out how roof types impact homeowners insurance.

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