How to read an adjuster’s roof estimate (RCV vs ACV, depreciation, O&P)
A few days or weeks after the adjuster climbs your roof, you’ll get an estimate that can run 10 pages or more. It’s full of abbreviations, unit prices, and a summary that subtracts things from other things. It’s worth reading slowly, because this document largely decides what your claim pays.
Here’s how to make sense of it.
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Get free roofer quotesThe summary page: five numbers that matter
Most estimates end with a short summary. The labels vary by insurer, but you’ll usually see some version of these:
- Replacement Cost Value (RCV): what the insurer calculates it would cost to repair or replace the damaged roof with similar materials today.
- Depreciation: a reduction for the age and condition of what was damaged.
- Actual Cash Value (ACV): RCV minus depreciation.
- Deductible: your share, subtracted from the payment.
- Net claim / payment: what the insurer is paying now.
You may also see depreciation split into recoverable (you can get it back after the work is done, on a replacement cost policy) and non-recoverable (you can’t).
A worked example
These numbers are made up to show the math. They are not a price estimate for any roof.
| Line | Amount |
|---|---|
| Replacement cost (RCV) | $18,000 |
| Less recoverable depreciation | −$6,000 |
| Actual cash value (ACV) | $12,000 |
| Less deductible | −$2,000 |
| First payment | $10,000 |
| Recoverable depreciation, paid after the work is done | $6,000 |
| Total if the work is completed | $16,000 (RCV minus deductible) |
On a replacement cost policy, the insurer often pays the ACV first and releases the held-back depreciation once you send proof the work is done, usually the final invoice. On an actual cash value policy, or if your roof is covered on an ACV basis because of its age, the first payment may be all you get.
Two practical takeaways:
- Your out-of-pocket cost on a completed RCV claim should usually be your deductible, if the estimate’s RCV matches what the job really costs.
- Ask your insurer how long you have to finish the work and claim the recoverable depreciation, and put that date on your calendar.
The line items: what to check
Estimates are usually built in estimating software (Xactimate is a common one) using a price list for your area. Each line has a description, a quantity, a unit, and a unit price. Here’s what to look at.
Measurements. Roofing is measured in “squares” (100 sq ft). Check that the total squares look right for your house, and whether a waste factor was added for cutting shingles around hips and valleys. If your roofer measured differently, ask both sides to show their numbers.
Tear-off and layers. If you have two layers of shingles, removing both costs more. Make sure the estimate reflects what’s actually up there.
Underlayment and ice barrier. Look for felt or synthetic underlayment, and ice and water shield where your local code requires it.
Edges and details. Drip edge, starter strip, ridge cap, hip and ridge shingles, step and counter flashing, pipe jacks, and vents are easy to miss. Each should be its own line if it’s needed.
Steep and high charges. Steep roofs (often 7/12 pitch and up) and two-story roofs usually carry extra labor lines.
Decking. Damaged or rotted decking may not be visible until tear-off. Often it’s handled later as a supplement, with photos.
Permits and code items. If your city requires a permit or code upgrades (for example, ice barrier or drip edge that the old roof didn’t have), check whether they’re included. Code upgrades often fall under separate “ordinance or law” coverage with its own limit, so look at your policy.
Other damage. Gutters, downspouts, screens, siding, and AC fins may be on the same claim, sometimes under different coverages.
Overhead and profit (O&P)
“O&P” is a general contractor’s overhead and profit. It’s often figured as 10% overhead plus 10% profit, but that’s a common industry convention, not a universal rule.
Insurers frequently include O&P when a job reasonably needs a general contractor to coordinate several trades, such as roofing plus gutters, siding, and interior repairs. A roof-only job may or may not include it, and practices differ by insurer and state. If you believe your job requires coordination of multiple trades, it’s fair to ask your adjuster why O&P was or wasn’t included.
Depreciation: how it’s calculated
Depreciation is usually based on the roof’s age and expected life, and sometimes its condition. A 12-year-old roof with a 25-year expected life might be depreciated around half. Some insurers depreciate labor as well as materials, and rules on that differ by state.
If the depreciation looks high, ask how it was calculated: what age and life expectancy they used. If your roof is younger than they think, a permit record or old invoice can fix that.
Supplements: when something was missed
A supplement is a request to the insurer to add items missed in the original estimate, like extra decking found at tear-off, a missed layer, or code-required items. It should come with photos and an explanation. Supplements are normal. Padding is not. A trustworthy roofer will show you exactly what they’re asking for and why.
Comparing the estimate to a roofer’s quote
Line them up side by side:
- Same number of squares?
- Same materials (shingle line, underlayment type)?
- Same scope (tear-off, layers, flashing, vents, gutters)?
- Is anything in the quote that isn’t in the estimate, or vice versa?
If the gap is big, ask your roofer to explain each difference in writing. You can also upload the quote to QuoteVya for a free, plain-English read on whether it’s in line, or post your job to get competing bids. To sanity-check the overall number, try our roof cost estimator.
Questions to ask your adjuster
- What measurements did you use, and can I see the diagram?
- How did you calculate depreciation (age and expected life)?
- Is my depreciation recoverable, and what’s the deadline to claim it?
- Why is O&P included or not included?
- Are code upgrades covered, and under which coverage?
- How do I submit a supplement if more damage is found?
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Get free roofer quotesFAQ
What is the difference between RCV and ACV?
Replacement cost value (RCV) is what it would cost to replace the damaged roof today. Actual cash value (ACV) is RCV minus depreciation for age and wear. Replacement cost policies often pay ACV first and the rest after the work is done.
What is recoverable depreciation?
It’s the portion of depreciation an insurer holds back and pays once you complete the repairs and send proof, usually the final invoice. Non-recoverable depreciation is not paid back.
Is overhead and profit always included?
No. It’s commonly included when a general contractor is reasonably needed to coordinate multiple trades, but practices vary by insurer and state. Ask your adjuster to explain the decision.
Can I keep the insurance money and not replace the roof?
On a replacement cost policy, you’ll generally only receive the ACV if you don’t do the work. If you have a mortgage, your lender may be named on the check and require the repairs. Not fixing real damage can also affect future claims.
What if my roofer’s quote is higher than the adjuster’s estimate?
Ask for an itemized explanation of the difference, then have the roofer submit a supplement with documentation for anything legitimately missed. If you and your insurer still disagree on the amount, see our guide on disputed and denied claims.
Sources
- Texas Department of Insurance, Homeowners insurance and disaster claims FAQ (ACV first payment, replacement cost after repairs): https://www.tdi.texas.gov/consumer/storms/home-damaged-faq.html
- Texas Insurance Code § 707.004 (proof of deductible payment before recoverable depreciation, Texas example): https://statutes.capitol.texas.gov/Docs/IN/htm/IN.707.htm