Does Insurance Always Cover a Full Roof Replacement?

Understanding Residential Roof Replacement and Insurance Coverage

When your roof needs replacing, the first thought is often to check if insurance will cover the costs. However, navigating insurance coverage for residential roof repairs and replacements is not always straightforward. There are many factors, including policy terms, damage causes, and coverage limitations, that determine if your insurance will cover the full cost of a new residential roof. It’s crucial to know what your policy includes and consider all your options to ensure you’re not caught off guard by unexpected expenses.

At American Commercial Roofing, we understand the frustration and stress that comes from dealing with insurance companies, especially when they don’t cover the full replacement cost. By being proactive and knowledgeable about your residential roofing insurance coverage and other available options, you can handle the residential roof replacement process more smoothly and confidently.

Will Insurance Fully Cover Roof Replacement?

Insurance policies differ widely, and coverage for a residential roof replacement depends on several factors:

Cause of Damage: Insurance usually covers damage from sudden events like storms or fires, but not from wear and tear.

Policy Details: Make sure to review your policy to see what types of roof damage are covered, the deductibles, and whether it offers full replacement cost, actual cash value, or a roof surface schedule for your residential roofing system.

Roof Age and Condition: Older or poorly maintained residential roofs might receive less coverage or have claims denied.

Local Codes: If replacements need to meet new building codes, your insurance might cover these residential roofing costs.

Exclusions: Some policies don’t cover certain damages, such as those from floods or earthquakes, which might require additional policies.

To ensure you’re fully prepared, review your policy thoroughly and consult with your insurance provider. Documenting roof damage and keeping repair records can also strengthen your insurance claim for your residential roof.

When navigating the complexities of homeowners’ insurance, understanding the nuances of coverage types is crucial, especially when it concerns one of your home’s most critical components: the roof. Three main types of policies play a pivotal role in how your insurance might cover roof damage: Replacement Cost Value (RCV) policies, Actual Cash Value (ACV) policies, and Roof Surface Schedule policies. Here’s a brief overview of each to help clarify the differences:

Replacement Cost Value (RCV) Policies

RCV policies provide coverage that pays for the full cost of repairing or replacing your damaged roof without deducting for depreciation, subject to your policy limits and deductibles. This means if your roof is damaged, the insurance company would cover the total cost to replace it with a new one of similar kind and quality. The primary advantage of RCV is that it doesn’t factor in the age or condition of your roof at the time of the damage, offering more comprehensive coverage.

Pros: Full roof replacement coverage. Out of pocket expenses can be as low as deductible only. These policies tend to have more comprehensive coverages and less exclusions than the more budget conscious policy offers.

Cons: Higher monthly premium.

Ex.: Mrs. Jones bought a home 3 years ago and has been with the carrier ever since. Her roof was 12 years old then, and is now 15 years old. Mrs. Jones has a $2,500.00 deductible. The insurance determined her roof replacement is $10,000. Due to depreciation of the roof system the insurance estimates the roof is only worth half its replacement cost in its current condition. The carrier releases $2,500 to Mrs. Jones to start the project, because the Actual Cash Value is $5,000.00, but her deductible is her responsibility. Upon completion of the roof replacement, Mrs. Jones receives another $5,000.00 from the insurance because she has replacement cost value coverage. In all, Mrs. Jones is given $7,500 towards her roof replacement!

Actual Cash Value (ACV) Policies

In contrast, ACV policies take into account the roof’s depreciation, meaning the insurer pays out the current actual cash value of your roof at the time of damage, not the cost to replace it. This figure is calculated by considering the roof’s age and wear and tear, which can significantly reduce the payout amount. As a result, homeowners with ACV coverage may find themselves paying more out-of-pocket costs to repair or replace a roof.

Pros: Lower monthly premium. Not all items depreciate with time, so the depreciation of the roof cost is negotiable and may not extend to the full cost of certain roof components and/or labor. (This varies based on state). 

Cons: The amount the insurance will pay for the roof depreciates based on time and condition of the roof. The deductible + depreciation becomes the responsibility of the insured.

Ex.: Mrs. Jones bought a home 3 years ago and has been with the carrier ever since. Her roof was 12 years old then, and is now 15 years old. Mrs. Jones has a $2,500.00 deductible. The insurance determined her roof replacement is $10,000. Due to depreciation of the roof system the insurance estimates the roof is only worth half its replacement cost in its current condition. The carrier releases $2,500 to Mrs. Jones to start the project, because the Actual Cash Value is $5,000.00, but her deductible is her responsibility. Upon completion of the roof Mrs. Jones must pay the balance to the contractor.

 **In an ACV Policy depreciation may be negotiable. Based on age and condition of the roof – a qualified roofing contractor MAY be able to argue the actual cash value of the roof is worth more than 50%. In other instances it may be less!**

Roof Surface Schedule Policies

Roof Surface Schedule policies offer a more structured approach, where the payout for roof damage is based on a predetermined schedule or formula that factors in the roof’s age. This type of policy essentially provides diminishing coverage as the roof gets older, with the insurance payout decreasing over time according to the roof’s lifespan and the schedule outlined in the policy. It offers a middle ground between RCV and ACV, providing clarity on the expected coverage amount as the roof ages but potentially limiting the payout for older roofs.

Pros: Low monthly payment. A SHOULD BE easy to follow payout schedule.

Cons: In our experience no homeowner has fully understood how a roof surface schedule works. It is sold as a replacement cost policy, but with a schedule that makes the roof more the homeowners responsibility as it ages. While this could/should be an easy to follow process – what homeowners tend to misunderstand is that every component (material and labor) will be paid out as a % of replacement cost across the board based on the year (age) of the roof. NOT the number of years you have been with the carrier. 

Ex.:  Mrs. Jones has been with the Carrier for 3 years. Her roof was 12years old when she bought the home. The roof is now 15 and Mrs. Jones’ Replacement cost is $10,000.00. Because the roof is 15 years old it only qualifies for 37% of its replacement cost. So, the payable amount of the roof per the Roof Surface Schedule is $3,700. Mrs. Jones is still required to pay her deductible of $2500. Mrs. Jones is only given $1,200 towards her roof replacement.


Choosing between RCV, ACV, and Roof Surface Schedule policies depends on several factors, including your financial flexibility, the age of your roof, and your risk tolerance. RCV policies tend to be more expensive but offer more comprehensive coverage, making them ideal for newer homes or those recently renovated. ACV policies might suit those looking for lower premiums and who are prepared to cover some costs out-of-pocket. Meanwhile, Roof Surface Schedule policies could appeal to homeowners who prefer a clear, predictable coverage schedule for their aging roof. Understanding these differences is key to selecting the right insurance policy to protect your home against unforeseen roof damage.

What If Insurance Doesn’t Cover Everything?

If insurance falls short for your residential roofing project, you have several strategies to consider:

Negotiate: Sometimes, providing more evidence or getting contractor quotes can persuade insurers to increase coverage.

Additional Coverage: You might buy extra coverage for gaps in your residential roofing policy.

Financing Options: Personal loans, home equity loans, or lines of credit can help cover residential roofing costs, but be mindful of interest rates and terms.

Partial Repairs: In some cases, fixing only the damaged parts of the residential roof can be a temporary, more affordable option.

Contractor Shopping: Comparing quotes from residential roofing contractors can ensure you’re getting a fair deal, and some contractors may offer financing or budget-friendly solutions.

Government Assistance: For certain types of damage, government programs might help with residential roofing costs.

It’s important to weigh each option carefully, considering long-term impacts and consulting professionals as needed.

Considering Financing

Financing can make a large expense like residential roof replacement more manageable over time. However, it’s vital to understand the loan terms and interest rates to avoid paying significantly more in the long run. Evaluate your monthly budget to ensure you can comfortably make payments without financial strain for your residential roofing needs. (Visit our Instant Roof Estimator Here or Our Finance Calculator Here – to see if any common financing options may be available that suit your need)

Key Takeaways

Navigating residential roof replacement and insurance coverage requires understanding your policy’s specifics and being aware of all available options. While insurance often covers damage from unforeseen events, it may not always cover the full cost of replacement. Exploring alternative solutions, negotiating with insurance, or considering financing can help manage the residential roofing process effectively.
**For homeowners in KS, MO, and GA looking for more information and a comprehensive report of your roof system – or more information about your specific storm damage situation – schedule an inspection with a qualified roofing professional HERE**

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