Understanding Your Insurance Claim

Two Rivers Exteriors recognizes that experiencing a sudden property loss can be traumatic.  Often, it’s possible to forget information you have received from your adjuster during the claim process and even more common to have difficulty understanding exactly what the claim covers.  We, at Two Rivers Exteriors would like to make this experience as comfortable as possible for you and help clarify any questions you may have about your claim. 

The following is a list of frequently asked questions that will help clarify the terminology used on your insurance claim.

Although you may have a “Replacement Cost Value (RCV)” policy on your home and/or personal property, the RCV coverage only applies if the repairs and/or replacement have been completed.  Per your policy the initial payment you receive is based on the “Actual Cash Value (ACV)” of the damages.  Below are a list of questions that will help explain what depreciation is and how you may receive the depreciated amount.

What is actual cash value (ACV)?

            Actual cash value is the cost to repair or replace damaged items with the same/similar kind and quality minus depreciation.

What is replacement cost (RCV)?

            Replacement cost is the cost to repair or replace damaged items with same/similar kind and quality, without deduction for depreciation.

How is depreciation calculated?

            Depreciation is based on the overall life expectancy of the item, with deductions for the item’s age and condition.  Example:  Assuming normal life expectancy of a roof is 20 years.  With normal conditions, the roof depreciates at a rate of 5% per year.  If the roof is 6 years old with normal wear and tear it has depreciated by 30%. (5% x 6yrs=30%).  Actual cash value is 70% of the replacement cost (100%-30%=70%).

What will I be paid?

            Actual cash value is normally what your claim will cover.   However, if you have replacement cost coverage (RCC), you can get the depreciation value back after the approved repairs have been completed.  Most homeowner policies carry RCC coverage.         

            In order to better represent you and your project, Two Rivers Exteriors requires a copy of your insurance estimate to help clarify what repairs and/or replacements have been included on your claim. 

How do I apply for the recoverable depreciation/replacement cost benefits?

              Once the repairs are completed, we will send an invoice or “depreciation request” to your insurance company indicating the work is complete.  Upon receipt of our request your insurance company will release a check to you for the amount of depreciation taken off your original claim.

Are there deadlines I must meet to collect the recoverable depreciation?

            Repairs or replacements must be completed per the time stated on your claim, normally within one year of the date of loss.

What advice do you have for locating a reliable contractor? 

            As the homeowner, you are always in control of the work being completed on your home.   Two Rivers Exteriors is a reputable contractor.   We are insured, bonded, and members of the BBB (Better Business Bureau) and NRCA (National Roofing Contractors Association).  In addition, Two Rivers Exteriors holds certifications with all major asphalt shingle manufacturers as “preferred” or “authorized” contractors. Upon request, we would be more than happy to provide you with a list of references.

Why is my mortgage holder listed on the payment?

            State regulations, your insurance policy and the mortgage companies require this to protect their financial interest in your property.   Contact the mortgage company for instructions and endorsements before cashing.