Roof materials are exposed to the elements. These materials begin to age and wear at the time of installation. As these materials age, they decrease (depreciate) in value. Many insurance companies will pay for roof repairs due to wind and hail on a depreciated basis. It is important to know the difference between “actual cash value” and “replacement cost” coverage for these events.

• Actual Cash Value (ACV) is the cost to replace or repair the property, taking into consideration age and general condition. ACV is equal to replacement cost minus depreciation.
• Replacement cost is the cost to replace the property without considering age or condition of the original item.

If your policy provides ACV coverage on your roof, the calculation for determining ACV is: Age of roof divided by the life expectancy of the roof. Life expectancy of a roof is based on material type and is determined by industry standards.

Kentucky Farm Bureau Mutual Insurance Company settles windstorm or hail losses to roof surfacing using ACV if the age of your roof is 7 years or older, OR, replacement cost if your roof has been replaced within 7 years from the date of loss. At the time of loss, Kentucky Farm Bureau employees will work with our members to determine the age of the roof.

If you have additional questions, please contact your local Kentucky Farm Bureau agent.