10/26/2026
If your homeowners insurance renewal showed up recently and the price barely went up (or didn't go up at all), this could be a red flag.
Some insurance companies are keeping premiums down by making a change you might not notice until it's too late: reducing your roof coverage.
More and more homeowners are finding themselves with Actual Cash Value (ACV) roof coverage instead of Replacement Cost Value (RCV).
This difference could cost you thousands of dollars after a hailstorm.
Here's what that means:
- Replacement Cost (RCV): Pays what it actually costs today to replace your damaged roof, without deducting for its age.
- Actual Cash Value (ACV): Pays the replacement cost MINUS depreciation for the age and condition of your roof.
Here's an example.
Say a hailstorm destroys your 12-year-old roof. It costs $20,000 to replace.
You have a 2% wind/hail deductible on a home insured for $350,000. That means your deductible is $7,000.
If you have RCV:
- The insurance company owes $20,000 minus your $7,000 deductible.
- You get $13,000. You're out $7,000.
If you have ACV:
- Let's say the insurance company depreciates your roof by 50% because of its age.
- Now, instead of $20,000, they're starting at $10,000.
- Subtract your $7,000 deductible.
- You get $3,000. You're out $17,000.
Same house, roof, storm, and deductible.
A $10,000 difference in what your insurance pays.
One of the most frustrating things I see in my practice is homeowners who have paid their premiums faithfully for years, only to find out after a storm that their coverage isn't what they thought it was.
Sometimes that change was buried in a renewal packet, and nobody ever explained what it actually meant.
So here's my advice before the spring storm season in SC rolls around again:
Look at your policy today.
If you have ACV coverage, ask how much it would cost to switch to RCV. You might be surprised how much more protection you could get for the difference in premium.
And if you decide to keep ACV coverage to save on premiums, that's fine too. Just make sure you understand the risk and are putting money aside for the possibility of replacing your roof.