Homeowners FAQs

Can I switch a Georgia homeowners policy from ACV to replacement cost?

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Quick answer: Switching from ACV to replacement cost goes through underwriting -- carriers commonly require a roof inspection or age documentation, and a roof past the age limit may not qualify.

Switching a Georgia homeowners policy from actual cash value (ACV) to replacement cost (RCV) settlement is usually possible, but it goes through underwriting rather than a simple request. Carriers commonly require a roof inspection or age documentation before agreeing to endorse RCV on a roof that was previously rated ACV, and a roof past a carrier's maximum age threshold may not qualify for the switch at all. The change is typically requested through your agent at renewal or as a mid-term endorsement, and it usually raises the premium, since the carrier is agreeing to pay more on a future claim.

What does underwriting check before approving the switch?

Underwriting typically reviews the roof's current condition, including its age, material, and any prior damage, and may require a physical inspection or recent photos before approving RCV. A roof already showing wear, or one nearing the end of its expected lifespan for its material type, is the most common reason a switch request is declined or approved only with conditions attached.

How do RCV and ACV compare on a real claim?

For example, suppose a kitchen fire destroys a refrigerator you bought eight years ago for $1,500. A new comparable model now costs $1,800. On an RCV policy, you receive $1,800 to buy the new fridge, less your deductible. On an ACV policy, the insurer applies depreciation and might pay only $700, leaving you to cover the rest out of pocket.

  • Replacement cost (RCV): pays to replace the item with a new one of similar kind and quality, with no deduction for age.
  • Actual cash value (ACV): pays the depreciated value, which is the replacement cost reduced by how old and worn the item was.

Where does the RCV vs. ACV gap show up most in Georgia?

Roofs are where this shows up most often. Wind and hail damage is common across Georgia, and an older roof loses a significant portion of its value to depreciation under an ACV settlement. Many homeowners do not realize their roof is rated on an ACV basis until a claim comes in far lower than expected. A roof that costs $18,000 to replace might generate a payout of only $9,000 on an ACV policy if it is ten years old with a 20-year expected lifespan. If a settlement seems off, our FAQ on what to do when a carrier estimate comes in low explains the options.

Does replacement cost coverage cost more in premium?

Replacement cost coverage usually costs a little more in premium, but for most homeowners the added protection is worth it. The difference in annual cost is often $50 to $150, while the difference in a major claim can be several thousand dollars. For example, a homeowner with a 15-year-old roof who carries RCV instead of ACV might recover $20,000 on a total roof loss rather than $8,000, a difference that no modest premium saving can offset. More detail is available in our FAQ on replacement cost vs. actual cash value.

How do you find out which valuation your policy uses?

Check your declarations page for the valuation method on your dwelling and personal property. Some insurers apply RCV to the dwelling but ACV to the roof after a certain age, so the two can appear on the same policy. If a claim settlement seems lower than the actual repair cost, our FAQ on CLUE reports and how claims history affects settlements is worth reading. To confirm how your home and belongings are covered and close any gaps, request a free coverage review with our team.