Know your policy · Minnesota policyholders
Most people don’t think about how their insurance policy values damage until they’re sitting across from an adjuster trying to understand why the check they received is half what a new roof costs. The answer almost always comes down to three letters: ACV vs. RCV.
What is Replacement Cost Value (RCV)?
Replacement Cost Value means your insurance company pays what it actually costs to repair or replace the damaged property with new materials of similar kind and quality — at today’s prices, regardless of the age of what was damaged.
If hail destroys a 12-year-old roof and a new roof costs $18,000, RCV coverage pays $18,000 (minus your deductible). This is what most homeowners assume they have.
What is Actual Cash Value (ACV)?
Actual Cash Value means your insurance company pays the depreciated value of the damaged property — what it was worth at the time of the loss, factoring in age, wear, and condition.
That same 12-year-old roof with a 25-year lifespan has used roughly half its useful life. Under ACV, the insurer might value it at $9,000 — and that’s what they pay, leaving you responsible for the other $9,000 out of pocket.
Why this is changing in Minnesota right now
Historically, most Minnesota homeowner policies included RCV coverage for roofs. That’s been changing. Insurance companies are now switching policies to ACV for roofs as young as 10-15 years old — often without prominently flagging the change at renewal. Many homeowners only discover this when they file a claim and receive a fraction of what they expected.
How to check what you have
Look at your declarations page — the summary page at the front of your policy. Find the section on dwelling coverage and look for language about “roof surfaces” or “roof covering.” If it says ACV or “actual cash value,” you have depreciation exposure on your roof.
If you’re not sure, call your insurance agent and ask directly: “Does my policy pay replacement cost or actual cash value for roof damage?” Get the answer in writing.
What to do if you have ACV coverage and a claim
ACV doesn’t mean you’re out of options — it means you need to fight harder. A public adjuster can challenge how depreciation is calculated, push back on aggressive depreciation amounts, and ensure the insurer isn’t using ACV as an excuse to undervalue your claim beyond what the policy actually allows.
Not sure what your policy covers?
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Ryan Wagner is the founder of Lighthouse Claims Consulting, a licensed public adjusting firm serving Minnesota homeowners and business owners.