What’s the Difference Between RCV and ACV on My Insurance Claim?

After a fire or major water loss, you just want your home back. But then you get your first insurance document, and it’s full of acronyms: RCV, ACV, and "Depreciation."

It’s confusing, but understanding these three terms is the key to your entire claim.

As an adjuster-friendly contractor in Asheville, NC, we "speak insurance" every day. Here is a simple breakdown of what these terms mean for you.

RCV (Replacement Cost Value)

RCV, or Replacement Cost Value, is what it costs to replace your damaged item with a new item of similar kind and quality today.

• Example: A 10-year-old roof is destroyed by a tree. A new roof costs $20,000 to install today. The RCV for your roof is $20,000.

This is the "good" number, the one you want. Most modern homeowners policies are RCV policies, but there's a catch.

ACV (Actual Cash Value)

ACV, or Actual Cash Value, is the RCV minus depreciation.

• Depreciation is the amount of value an item has lost over time due to age, wear, and tear.

• Example: That same $20,000 roof is 10 years old and has a 20-year lifespan. Your insurance company might say it has "depreciated" by 50%, or $10,000.

• The ACV is $20,000 (RCV) - $10,000 (Depreciation) = $10,000.

How You Get Paid: The Two-Check Process

This is where it all comes together. Your insurance company doesn't just hand you a check for the RCV.

1. The First Check (ACV): The insurance company will pay you the Actual Cash Value (ACV) first, minus your deductible. In our example, they would send you a check for $10,000 (minus your deductible). This check is to get the work started.

2. The Second Check (Depreciation): You then hire a contractor (like us) to do the work. Once the work is complete and you prove you spent the money (with a final invoice), the insurance company "releases" the depreciation. They send you the second check for $10,000.

This is how they ensure you actually use the money to fix the house.

How We Help: We Speak Xactimate

This entire process can be a nightmare if your contractor's estimate doesn't match the insurance company's.

This is our single biggest advantage.

• We Speak Insurance: We don't write estimates on a notepad. We use Xactimate, the same estimating software that 99% of insurance carriers use.

• Adjuster-Friendly Scope: We meet your adjuster on-site. Our Xactimate estimate uses their line items, their pricing, and their format. This means seamless approvals and no guesswork.

• Supplements: If we find hidden damage (like wet subfloor under a cabinet), we know exactly how to file a supplement with the proper documentation to get it covered.
   

You have a stressful problem. Don't add a stressful claim to it. We solve stressful problems—fast. One call: mitigation → insurance → rebuild.

Call Living Stone Restorations. We’ll meet your adjuster, document the loss, and manage the entire process so you don't pay more than your policy allows.