ACV vs RCV vs Roof Payment Schedule: Why Two Colorado Neighbors Get Different Insurance Checks

The three settlement frameworks Colorado carriers use today

Every Colorado homeowner policy resolves a roof claim under one of three frameworks. The framework is set on the declarations page, often in language a homeowner would not recognize as significant. The names vary slightly by carrier but the mechanics are consistent.

• Replacement Cost Value, often abbreviated RCV. The carrier pays what it costs to replace the damaged property with new property of like kind and quality at current prices, less the deductible. Depreciation is held back as recoverable depreciation and released after the work is completed and documented.
• Actual Cash Value, often abbreviated ACV. The carrier pays Replacement Cost minus depreciation based on the age and condition of the damaged property, less the deductible. The depreciation is not recoverable. The homeowner pays the gap.
• Roof Payment Schedule, often abbreviated RPS, sometimes called Roof Surfaces Payment Schedule or Roof Settlement Schedule. The carrier pays a defined percentage of replacement cost based on the age of the roof at the time of loss. Older roofs receive a smaller percentage. The schedule is published in the endorsement.

How RCV actually pays out, in two checks

RCV claims in Colorado almost always pay out in two installments. The first check is the Actual Cash Value plus any non-roof items, less the deductible. The second check is the recoverable depreciation, released only after the work is documented as completed and the final invoice is submitted.

On a typical claim of 22,000 dollars total replacement cost on a twelve-year-old roof with a 2,500 dollar deductible, the first check is roughly 13,500 dollars. The second check, after work completion, is the remaining 6,000 dollars. The homeowner finances the gap during construction or arranges with the contractor for direct payment of the depreciation release on the carrier's check.

The recoverable depreciation portion is forfeit if the homeowner does not complete the work within the carrier's deadline, typically one year from the date of loss with extensions available on request.

How ACV actually pays out, with the gap visible

ACV claims pay one check. The carrier calculates Replacement Cost, subtracts depreciation based on the age of the roof, subtracts the deductible, and issues the remainder. There is no second check.

• Same 22,000 dollar replacement cost, twelve-year-old roof, 2,500 dollar deductible.
• Depreciation calculation: typical schedule depreciates an architectural shingle roof at roughly 4 percent per year. Twelve years equals 48 percent depreciation, or 10,560 dollars.
• Settlement: 22,000 minus 10,560 minus 2,500 equals 8,940 dollars.
• The homeowner is responsible for the remaining 13,060 dollars out of pocket if they want a new roof installed.

How a Roof Payment Schedule endorsement actually pays out

RPS endorsements have become more common on Colorado renewals since 2022. The schedule is set in the endorsement document and varies by carrier. A representative schedule looks like the table below.

• Years 1 to 5: 100 percent of replacement cost.
• Years 6 to 10: 80 percent of replacement cost.
• Years 11 to 15: 60 percent of replacement cost.
• Years 16 to 20: 40 percent of replacement cost.
• Years 21 and older: 25 percent of replacement cost.

The same claim under all three frameworks

The numerical comparison makes the difference visible. Same Lakewood home, same hailstorm, same 22,000 dollar replacement cost, same twelve-year-old roof, same 2,500 dollar wind and hail deductible.

• RCV settlement: 19,500 dollars total, paid in two checks. Homeowner pays the deductible of 2,500.
• ACV settlement under typical 4 percent annual depreciation: 8,940 dollars in one check. Homeowner gap to a new roof: 13,060 dollars.
• RPS settlement under a 60 percent factor for years 11 to 15: 22,000 multiplied by 0.60 equals 13,200, less the 2,500 deductible equals 10,700 dollars. Homeowner gap to a new roof: 11,300 dollars.
• The premium difference between RCV and ACV or RPS is usually small relative to the claim difference. Often a few hundred dollars per year on the policy buys the larger settlement when a claim occurs.

Cosmetic damage exclusions and how they interact with each framework

A growing number of Colorado renewals carry cosmetic damage exclusions on metal roofing, gutters, downspouts, and certain siding. The exclusion permits the carrier to deny the claim if the damage does not affect the function of the material, regardless of which valuation framework applies. A dented metal roof that still sheds water is denied. A dented gutter that still drains is denied.

Cosmetic exclusions matter most on standing seam steel and aluminum roofs, where hail commonly produces visible denting without compromising water shedding. If a homeowner is upgrading to a metal roof, confirming whether the policy carries a cosmetic exclusion is a separate decision from confirming the valuation framework.

Wind and hail percentage deductibles

Many Colorado carriers have moved from flat dollar deductibles to percentage deductibles on the wind and hail peril. The percentage applies to the dwelling coverage limit, not to the claim amount. On a 600,000 dollar dwelling limit, a one percent wind and hail deductible is 6,000 dollars and a two percent deductible is 12,000 dollars.

The shift to percentage deductibles has the effect of pushing smaller claims below the deductible threshold. A 5,000 dollar partial roof repair on a home with a 6,000 dollar percentage deductible produces no insurance payment. The homeowner pays out of pocket and the carrier records no claim.

How to read your declarations page in five minutes

Every Colorado homeowner can answer the framework question in five minutes by reading the declarations page and the endorsement schedule that comes with the renewal packet. The relevant items appear under Coverage A or under separate endorsements with explicit names.

• Look for the words Replacement Cost or Actual Cash Value next to Coverage A Dwelling. RCV is the standard. ACV is a downgrade.
• Look for any endorsement titled Roof Payment Schedule, Roof Surfaces Payment Schedule, or Roof Settlement Schedule. If present, read the percentage table. These endorsements override the base coverage.
• Look for any endorsement titled Cosmetic Damage Exclusion, Cosmetic Loss Exclusion, or similar. If present, identify which materials are listed.
• Look for the wind and hail deductible. Confirm whether it is a flat dollar amount or a percentage of dwelling coverage.
• Look for an endorsement titled Roof Age Schedule or Roof Limitation Endorsement. Some carriers add these to apply different terms based on roof age.

Carrier patterns observed on Front Range renewals

Carrier behavior is not uniform but patterns are observable. The summary below reflects broker-reported patterns on Front Range renewals through 2025 and into 2026.

• State Farm: typically retains RCV on roofs under 15 years, may apply RPS schedule on roofs 15 years and older. Cosmetic exclusion sometimes added on metal.
• Allstate: increasing use of percentage deductibles, RPS on aging roofs common, cosmetic exclusions on certain metal and gutter coverage.
• USAA: generally retains RCV longer than the carrier average, percentage deductibles on the wind and hail peril have become standard since 2024.
• Farmers and Foremost: extensive use of RPS endorsements and cosmetic exclusions, particularly on roofs over 12 years.
• American Family: variable by underwriting unit, RPS becoming common on second renewals after a hail claim.
• Travelers, Liberty Mutual, and Nationwide: declining new business in some Front Range ZIP codes, with RPS or ACV common on existing renewals over 15 years.

What to do at the next renewal

The renewal packet is the practical control point. Three steps preserve coverage that pays a real claim.

• Read the declarations page and the endorsement schedule. Identify the framework, the deductible structure, and any cosmetic or roof-age limitations.
• If the policy has been moved to ACV or RPS without your knowledge, request a written quote to restore RCV. The premium difference is often modest and the coverage difference is substantial.
• If the policy carries a cosmetic exclusion and you have a metal roof, request a quote with the exclusion removed. If the carrier will not remove it, shop alternative carriers.
• If your roof is over 15 years old and your carrier is moving toward RPS or ACV, the practical question is whether to replace the roof while RCV is still in force. The numerical advantage of replacing under RCV is often larger than the cost of waiting another year or two.