At Preferred Insurance Agency here in La Crosse, WI, we often get questions about how home insurance covers roof damage. Not all policies are created equal, and understanding the type of roof coverage you have can make a big difference when it comes time to file a claim. Let’s break down the three main types of roof coverage: Replacement Cost, Actual Cash Value, and Payment Schedule.
Replacement Cost (RC)
Replacement Cost coverage means your insurance will pay to repair or replace your damaged roof without deducting for depreciation. This is the most comprehensive coverage available. If your 15-year-old roof is damaged in a storm, you get reimbursed for the cost of a brand-new roof of similar kind and quality, minus your deductible.
Pros:
- Full payout for repairs or replacement
- No depreciation
Cons:
- Higher premiums
Actual Cash Value (ACV)
Actual Cash Value coverage factors in depreciation. That means the older your roof, the less your insurance company will pay out. If your 15-year-old roof is damaged, your insurer will subtract depreciation before issuing a payout, which can leave you covering a large portion of the cost.
Pros:
- Lower premiums
Cons:
- Depreciation can drastically reduce your payout
- Higher out-of-pocket costs after a claim
Payment Schedule
A newer and increasingly common option is the Payment Schedule. This method assigns a set value to your roof based on its age and material, and that value decreases on a fixed schedule over time. Unlike ACV, which requires calculating depreciation, this model is more straightforward but often less generous.
Pros:
- Predictable payout amounts
- Often more affordable than RC
Cons:
- May leave you short on funds to fully repair or replace your roof
So, What’s Right for You?
Living in La Crosse, we’re no strangers to hail, wind, and winter weather. That makes understanding your roof coverage even more critical. Replacement Cost coverage gives you the most peace of mind, especially in areas prone to storm damage. But if you’re looking to lower your premiums, ACV or a Payment Schedule plan might fit better—just be prepared for higher out-of-pocket costs in the event of a claim.
Need help reviewing your policy? Give us a call at Preferred Insurance Agency. We’ll walk you through your current coverage and make sure your home—and your roof—are properly protected.
Tony Rausa
Preferred Insurance
401 King St.
La Crosse, WI 54601
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