Find the replacement amount
Locate the replacement-cost figure in the relevant estimate and compare its work scope with the contractor’s quote. Do not treat a sale price, premium or policy limit as the same input.
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ACV versus RCVSee the gap between the contractor quote and the insurance check
Replacement cost is what the work costs today. Actual cash value subtracts age and wear. Enter the four numbers that control the difference and watch the settlement build itself.
Reviewed 25 October 2026 · Written by Mantu Kumar
See the illustrated project guide
Written and maintained by Mantu Kumar
Evidence review4 August 2026
Calculation rulesRead the methodology
Quality standardEditorial policy
2026 planning ranges
- 1Replacement cost (RCV)
- 2Age against expected life
- 3Depreciation held back
- 4Deductible
- 5First check (ACV)
- 6Gap you pay on ACV
- 7Expected life by material
- 8Depreciation paid back on RCV
- 9Depreciation cap and floor
Straight-line rule: Depreciation = age ÷ life Capped at 80%; 20% floor RCV pays it back after work
Insurance claim gap calculator
No email · nothing sentDiagram, part by part
See the gap between the contractor quote and the insurance check: every numbered part explained
The see the gap between the contractor quote and the insurance check drawing above has 9 numbered parts, from Replacement cost (RCV) to Depreciation caps and floors. Each card below frames one of them, with what to check on a quote or claim.
1 Replacement cost (RCV)
Your contractor's full price
Replacement cost value is what it costs to do the job today with similar materials and current labor rates. It is the starting number on every insurance estimate, and it should match a detailed contractor quote for the same scope.
What moves it: Labor rates in your area, the materials chosen and the full scope of the job.
On the quote: Compare the insurer's replacement cost line by line with your contractor's written estimate.
2 Age against expected life
Age ÷ expected life
Insurers estimate how much value has worn away by dividing the item's age by its expected life. A 12-year-old roof on a 20-year life has used 60%. Expected lives vary by material, so the same age can mean very different depreciation.
What moves it: The item's age and the expected life the adjuster assigns to that material.
On the quote: Ask which expected life the adjuster used and where it comes from.
3 Depreciation held back
Replacement cost × percent used
Depreciation is the worn-away share of the replacement cost. On a replacement cost policy it is held back from the first check and paid after the work is finished; on an actual cash value policy it is never paid.
What moves it: The replacement cost and the percentage of life used.
On the quote: Ask whether depreciation is recoverable under your policy and what proof of completion is needed.
4 Deductible
From your declarations page
The deductible comes off once per claim before anything is paid. Some states and policies use a separate percentage deductible for wind or hail, which can be much larger than the regular one.
What moves it: Your policy deductible and whether a wind or hail percentage applies.
On the quote: Check whether a flat or percentage deductible applies to this cause of loss.
5 First check (ACV)
Replacement cost − depreciation − deductible
The first check is the replacement cost minus depreciation minus the deductible. On an actual cash value policy it is the only check you will receive, so it decides how much of the job you can afford.
What moves it: Replacement cost, depreciation and the deductible.
On the quote: Ask whether the first check is made out to you alone or also to your mortgage lender.
6 Gap you pay on ACV
Depreciation + deductible on ACV
On an actual cash value policy, the depreciation and the deductible are both your share of the bill. That gap is why the policy type matters so much on older roofs and systems.
What moves it: Policy type and the item's age.
On the quote: Look on your declarations page for "replacement cost" or "actual cash value" on dwelling and roof coverage.
7 Expected life by material
The input that moves depreciation most
Adjusters use typical service lives for each material, such as 20 to 30 years for asphalt shingles or 15 to 20 for a furnace. A longer expected life lowers the percentage used and shrinks the depreciation for the same age.
What moves it: The material, its quality grade and the schedule your insurer uses.
On the quote: If the expected life looks short for a premium product, send the manufacturer specification to the adjuster.
8 Recoverable depreciation (Check #2)
Paid after the work on RCV policies
On a replacement cost policy, the depreciation held back from the first check is paid as a second check once the work is finished and you send the final invoice. Most policies set a deadline, often 180 days to two years.
What moves it: Your policy wording, the completion deadline and the final invoice amount.
On the quote: Ask the adjuster for the deadline in writing and keep the final invoice and photos of the finished work.
9 Depreciation caps and floors
Often capped at about 80%
Many insurers cap depreciation so an old item still keeps some value, often a floor of around 20%. Others use schedules that drop faster in the early years. The rule your insurer uses can change the first check by thousands of dollars.
What moves it: Your insurer's depreciation schedule and state rules.
On the quote: Ask which depreciation schedule or cap was applied and request it in writing.
A closer look at your project
Put the quote and claim documents side by side
The important comparison is between matching scopes. A contractor’s project price and a claim payment may describe different amounts or stages.
Look closer at three details before you compare see the gap between the contractor quote and the insurance check quotes. These close-ups are crops of the same AI-generated illustration.
Keep depreciation and deductible separate
Use the age, expected life and deductible fields to explore this page’s model. Its straight-line depreciation assumption may differ from the schedule or terms in your claim documents.
Distinguish first payment from final payment
Ask the insurer which amounts are payable now, potentially recoverable later, excluded or capped. A modeled gap is not proof of underpayment or a promise of additional payment.
Before comparing totals, ask for these details
- Matching scope
- Same damaged items, quantities and repair/replacement work
- Policy details
- Applicable deductible, coverage terms and depreciation method
- Payment stage
- Initial payment, conditions for later payment and deadlines
Planning illustration, not a promise of coverage
The calculator uses straight-line age depreciation capped at 80%. A carrier may use a condition-based schedule, a roof-surface endorsement, a payment cap or different useful life. The written policy and claim estimate control.
Worked example: why $16,805 can become $4,652
An 18-year-old architectural shingle roof is estimated at $16,805 to replace. At the 28-year expected life this site uses for architectural asphalt, straight-line depreciation is 64.3%. That leaves about $6,002 of actual cash value. Subtract a $1,350 deductible and the first check is about $4,652.
On an ACV-only policy, the unrecovered portion remains with the homeowner. On an RCV policy, eligible depreciation may be held back and paid after replacement is completed and documented. The deductible remains the homeowner’s share in either path.
In this guide
Where to find the four numbers
Replacement cost
Use the carrier’s replacement estimate or a written contractor quote with comparable scope. Check that removal, disposal, permits, code items, access, flashing, trim and related repairs are either included or clearly excluded.
Age and expected life
Age may come from permits, invoices, inspection reports or the carrier file. Useful life varies by material and the depreciation schedule being applied. Change the useful-life input until it matches the schedule shown on the adjuster estimate.
Deductible
Use the deductible that applies to this loss. Wind, hail, hurricane or named-storm deductibles can differ from the standard all-perils amount and may be expressed as a percentage.
How to read the animated result
The result separates the claim into four layers: replacement cost, depreciation, the deductible and the payment. The two colored paths then show the practical difference between stopping at ACV and completing an eligible RCV claim.
| Result | What it means |
|---|---|
| First check | Estimated ACV after the deductible. This is often the payment visible before completed work. |
| Recoverable depreciation | The eligible holdback that may be released under RCV terms after documented replacement. |
| ACV homeowner share | The difference between replacement cost and the first check. |
| RCV homeowner share | Usually the deductible, subject to coverage, limits, scope and what was actually spent. |
Questions to ask before work starts
- Is the damaged item settled at ACV or RCV under the controlling endorsement?
- How much depreciation is recoverable, and what deadline applies?
- What invoices, photos, permits or completion documents must be submitted?
- Does the estimate include code upgrades, matching and all affected adjacent materials?
- How will supplements be reviewed if hidden damage changes the scope?
Claim checklist: 6 items to compare
A gap between the estimate and the contractor price usually comes from a few specific lines.
- Both estimates. The adjuster's and the contractor's, line by line.
- Missing items. Items in one estimate but not the other.
- Quantities. Squares, feet and sheets on each.
- Unit prices. Large price differences for the same item.
- Code items. Upgrades required by local code.
- Overhead and profit. When a general contractor coordinates several trades.
How a gap usually gets resolved
| Stage | Typical time | What happens |
|---|---|---|
| Line-up | 1 – 3 days | Compare the two estimates. |
| Supplement request | 1 day | Send missing items with evidence. |
| Insurer review | 1 – 4 weeks | Response or re-inspection. |
| Revised estimate | 1 – 2 weeks | Approved items added. |
| Remaining gap | Your decision | Negotiate, appraise or pay the difference. |
Keep the conversation in writing and send each supplement with photos, so every item has a record.
Ways to close the gap
Most gaps shrink when missing items and quantities are documented.
- Line up both estimates. Compare item by item, not totals.
- Document quantities. Measurements and photos support each line.
- Cite code requirements. Required items are easier to approve.
- Ask about overhead and profit. When three or more trades are coordinated.
- Request a re-inspection. When damage was missed.
- Keep everything in writing. Emails create a clear record.
Signs the gap will not close
Then appraisal or other options may be needed.
- Repeated denials without reasons. Ask for the reason in writing.
- Large unit price differences. Local pricing evidence may be needed.
- Disputed cause of damage. May need an expert opinion.
- Upgrades in the contractor price. Upgrades are your cost.
- Deadlines approaching. Protect your rights before they pass.
Claim gap questions
What is the gap between replacement cost and actual cash value?
It is the portion of today’s replacement cost not included in an ACV payment after depreciation and the deductible. On an RCV claim, eligible depreciation may be recoverable after completed work; on an ACV-only claim it generally remains your share.
Why is the first insurance check smaller than the contractor quote?
The first check may subtract depreciation, the deductible and non-covered items. It can also reflect a narrower scope than the contractor quote. Compare the two line by line, not only by total.
How does recoverable depreciation change my claim gap?
It is the amount held back from the initial ACV payment that may be released on an eligible RCV claim after repair or replacement is completed and documented.
Is the deductible subtracted before or after depreciation?
Claim estimates commonly show replacement cost, subtract depreciation to reach ACV, then subtract the deductible from the payment. The carrier estimate and policy language control the actual presentation and settlement.
Where do I find whether my policy is ACV or RCV?
Check the declarations page and the endorsement covering the damaged property. Look for replacement cost, actual cash value, roof surface schedule or cosmetic damage wording. Ask the carrier to identify the controlling form if it is unclear.
Can depreciation be more than 80%?
Specific schedules and forms can differ. This planning tool caps straight-line depreciation at 80% so the item retains a 20% residual value; it does not reproduce a specific carrier schedule.
Is this an insurance coverage decision?
No. It is a planning illustration. The policy, endorsements, cause of loss, adjuster estimate and completed-work documentation determine the real payment.
Why does the adjuster's estimate differ from my contractor's?
Adjusters often use estimating software with regional unit prices, while contractors price their own labor and materials. Differences usually come from missing items, different quantities or different unit prices. Comparing the two line by line shows which it is.
What is a supplement?
A supplement is a request to add items or quantities to the approved estimate. It should list each item, the quantity, the price and the reason it is needed, with photos or code citations.
Can I ask for a re-inspection?
Yes. If you believe damage was missed, ask the insurer in writing for a re-inspection and be present with your contractor if possible. Point out each missed area and bring photos.
What is appraisal?
Many policies include an appraisal clause for disputes over the amount of the loss. Each side picks an appraiser, and an umpire settles any disagreement. It usually does not decide whether something is covered, only how much it costs.
Does the gap include my deductible?
Yes. Even when the estimate and contractor price match, you pay the deductible. On an actual cash value policy you also absorb the depreciation, which often makes up most of the gap.
Are upgrades part of the claim gap?
No. Choosing a better product than you had is an upgrade, and the difference is your cost. Ask the contractor to price the like-kind repair and the upgrade separately so the claim is clear.
How long should I wait for a response?
Many states set time limits for insurers to acknowledge, investigate and respond to claims. If you hear nothing for several weeks, follow up in writing and keep a record of each contact.
Who can help if the gap will not close?
Your agent, the insurer's claim manager, a licensed public adjuster or an attorney can help, depending on the size of the dispute. Your state insurance department also takes complaints.
Is the deductible part of the gap?
Yes. Even when the insurer and contractor agree on every line, you pay the deductible, so it is always part of the difference between the contract price and the claim payments.
Can a gap be negotiated?
Often, with documentation. Missing items, wrong quantities and code requirements can be supplemented with photos, measurements and citations.
Does matching affect the gap?
If your state or policy requires a reasonable match, the scope may grow to include undamaged areas, which can close a gap caused by unmatchable materials.
Summary
Replacement cost answers, “What does the work cost today?” Actual cash value answers, “What was the damaged item worth immediately before the loss?” The deductible and recoverable depreciation connect those numbers to the checks you receive. Run the physical estimator first, compare scopes line by line, then use this calculator to see both payment paths.
Related
- Should I file a claim? — the payout against the premium increase a claim can bring
- Water damage cost calculator — size a water loss before you file
- Roof replacement cost — the claim this tool is most often run for
- Roof damage: what to do first — documenting the loss before you file
- What insurance actually pays — the claim process end to end
- Taxes and financing — how people cover the gap
- Home rebuild cost calculator — check whether your dwelling limit covers a full rebuild
- All replacement estimators — get a replacement figure to feed in here
Where this method comes from
The calculation follows how carriers actually settle a claim: replacement cost less straight-line
depreciation for age against the item's expected life, floored at a 20% residual because most
carriers do not depreciate to zero, then less your deductible. The difference between that first
check and the full replacement cost is the recoverable depreciation, which a replacement cost
policy releases once the work is finished and an actual cash value policy never pays.
Expected lifespans match those used across the estimators on this site. Carriers vary —
some apply their own depreciation schedules, some cap payouts by age, and wind and hail often
carry a separate percentage deductible. This is a planning estimate, not a coverage determination.
Evidence trail
Reviewed 4 Aug 2026Sources used to check this model
Primary public references anchor ACV, replacement-cost and deductible terminology. The calculator is a planning model; the written policy and carrier estimate control the claim.
Core definitionsNAIC: ACV and replacement cost
Consumer guidanceNAIC homeowners insurance
Local regulatorNAIC state insurance departments
These organizations do not endorse ReplaceCost. The written policy, adjuster estimate, contractor scope and applicable state law control the real result. See the full methodology for the source hierarchy and update process.
Claim-gap planning
Understand the gap before you commit to the work
Break the difference into scope, pricing, depreciation, deductible and non-covered items.
Recoverable depreciation trackerWhen the held-back money is actually paid.Contents claim calculatorBelongings depreciated by category.
Scope differences
Check whether the contractor and carrier are pricing the same work and quantities.
Price differences
Unit price, labor assumptions and disposal or access costs can create a gap even with the same scope.
Depreciation and deductible
Separate temporary withheld depreciation and the policy deductible from true uncovered cost.
Document supplements
Provide measurements, photos and supporting invoices when additional covered work is discovered.
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