ACV vs. RCV.

A homeowners insurance policy bought for a new roof is typically written to cover RCV (replacement cost value). If a storm destroys your roof, your insurance pays for a new roof "of like kind and quality" to return your home to a habitable state. Many homeowners incorrectly assume that their home insurance policy will always provide this level of coverage. As with any purchase, depreciation begins immediately. After about ten years, most insurers will include a change of policy with your annual renewal notice. After that renewal, your roof coverage will be calculated for ACV, or actual cash value. At that point, a claim made on your home would pay out the depreciated value of your roof on the date of the claim, not what it would cost you to replace the roof with materials and labor of the same quality. The older the roof, the bigger the gap between ACV and RCV. Here's what that looks like on a $20,000 roof with a typical 25-year depreciation schedule:

Some homeowners may be unaware of this switch in coverage until the damage is done. That could mean that a contractor presents them with a $25,000 estimate for the needed repairs and they're told that the insurance company will only be writing a check for $10,000…or less. This kind of coverage gap would be a source of significant financial stress for anyone. But the repair bill isn't the only issue. Many lenders and mortgage companies now refuse to issue or maintain a mortgage on a home with an ACV roof. In many cases, homeowners have been unable to qualify for a mortgage because the lender saw the older roof, noted the ACV exclusion, and backed out of the deal. A real-world example. A 14-year-old roof in a 1% wind and hail deductible state, with an ACV policy:

Sola is a standalone policy. It works whether your homeowners coverage is ACV or RCV — and unlike your homeowners carrier, Sola does not hold the age or material of your roof against you when you file a claim. When a qualifying storm hits and you file a claim, in most cases Sola pays you the full policy limit you bought, directly, with no inspections and no questions asked about depreciation. That means you can use a Sola policy specifically to cover the depreciation gap on an older roof. Your homeowners carrier writes you a check for the depreciated value, and Sola fills in the difference so you can actually buy a new roof. With a Sola policy written to cover your wind and hail deductible plus the depreciation gap, the same roof repair bill looks like this: