Short answer: RCV (Replacement Cost Value) is what it costs to replace the item new today. ACV (Actual Cash Value) is RCV minus depreciation for age and wear. Your policy determines which one you’re paid on, and it changes what you actually collect.
Long answer: These two terms show up on nearly every estimate, and the difference between them can mean thousands of dollars.
RCV is the cost to replace a damaged item with a new equivalent, at today’s prices, before any deduction. ACV takes that number and subtracts depreciation — how much value the item has lost due to age and use. A 15-year-old roof and a 2-year-old roof have very different ACV even if the RCV to replace them is identical.
Many policies pay ACV upfront, then release the depreciated difference (“recoverable depreciation”) once repairs are complete and documented — but only if you request it and only within the timeframe your policy allows. Some policies never release that depreciation at all (non-recoverable depreciation), which matters when you’re deciding how to budget for repairs.
We read this off your policy specifically, not off assumptions, and we explain in plain language what your policy actually pays and when.
See also BTB Tips: https://builditbackbetter.com/tips/acv-vs-rcv-explained/
Better Than Before Restoration provides free fire, water, and storm damage inspections for homeowners in Northwest Alabama and Southern Middle Tennessee. We’ll give you a straight answer on whether filing makes sense — even when that answer is “not yet.”
(256) 740-FIRE