Replacement Cost vs ACV in Florida: 2026 Homeowner Guide

A hailstorm cracks the asphalt shingles on a 14-year-old roof in Plantation. The adjuster confirms a covered loss and writes the roof up at a replacement cost of $22,000. The check arrives for $9,600 minus your $5,000 hurricane deductible, so you net $4,600. Your roofer wants $22,000 up front. You stare at the cover letter and find the line that explains the gap: the policy settles roof claims on actual cash value because of the carrier's roof-age schedule. The other $12,400 was real money the policy never owed you. Your contract did exactly what it said. You just never read the loss settlement clause.

Replacement Cost Value (RCV) and Actual Cash Value (ACV) are the two ways a Florida homeowners policy can pay a covered loss. The difference is depreciation, and on a typical claim it is the difference between a check that finishes the repair and a check that funds about a third of it. Every Florida policy uses one of the two on each coverage, and many policies use both: RCV on the dwelling structure, ACV on the roof, and either RCV or ACV on personal property depending on the form. This guide walks through what the two terms actually mean, what Florida Statute § 627.7011 requires, how the SB 2-A roof rules changed the math in 2022 and what carriers are doing with that authority in 2026, how recoverable depreciation works in practice, and which line items on your declarations page tell you which basis applies to which coverage.

What RCV and ACV Actually Mean

Replacement Cost Value pays the cost of repairing or replacing damaged property with materials of like kind and quality, at current prices, without subtracting for age or wear. A 12-year-old laminate shingle roof destroyed by a tornado is paid as a new laminate shingle roof installed today. A 2018 stove ruined by a kitchen fire is paid as a new equivalent stove. The policy is not buying you a luxury upgrade; it is buying you back what you had on the day of the loss, priced at what that costs now.

Actual Cash Value pays Replacement Cost minus depreciation for age, condition, and remaining useful life. The same 12-year-old shingle roof valued at $22,000 to replace might be assigned a 24-year expected life by the carrier's depreciation schedule. Half the useful life is gone, so the depreciation hit is roughly 50 percent and the ACV settlement is roughly $11,000. The same 2018 stove might depreciate to $250 against a $900 replacement quote. ACV is not punitive; it is a math formula. The formula is also the entire reason policyholders are surprised at claim time.

Depreciation schedules vary by carrier and by item category. Florida does not set a single statewide table. Two carriers looking at the same 14-year-old roof can come back with payments thousands of dollars apart depending on the useful-life assumption baked into their schedule. The Florida Office of Insurance Regulation reviews and approves those schedules during the rate-filing process; the schedule is in the carrier's filed forms whether or not you ever see it.

What Florida Statute § 627.7011 Requires

Florida Statute § 627.7011 is the central provision that governs how homeowners losses are valued. The statute does three concrete things. It requires the carrier to offer Replacement Cost coverage at the time the policy is issued. It controls how partial losses on the dwelling are paid. And it sets the rule for total losses.

The offer of replacement cost coverage

Before issuing a homeowners policy, the carrier must offer a policy or endorsement that adjusts repaired or replaced losses on a Replacement Cost basis rather than ACV, up to policy limits. The offer is mandatory. The acceptance is not. A policyholder can choose ACV on Coverage A to lower the premium, but the carrier cannot quietly default the policy to ACV without offering the RCV alternative in writing first. If your declarations page shows a dwelling settled on ACV, look for the signed rejection of replacement cost coverage in your application file. It should exist.

Partial losses on the dwelling

For a partial dwelling loss on an RCV policy, the carrier must initially pay at least the Actual Cash Value of the loss, less any applicable deductible. The carrier then pays any remaining amount necessary to perform the repair as the work is performed and the expenses are incurred. The mechanic is what the industry calls "recoverable depreciation." You get ACV up front, and the depreciation portion is held back until you prove the repair is done.

Total losses on the dwelling

If the dwelling is a total loss on an RCV policy, the carrier must pay the Replacement Cost limit without reservation or holdback of any depreciation, whether or not the insured actually rebuilds. The Valued Policy Law under Florida Statute § 627.702 reinforces the rule: on a total loss caused by a covered peril (other than flood), the carrier owes the face amount of the policy. The depreciation game does not apply to a total loss.

The Roof Trap: How SB 2-A Changed Settlement in 2022

Before 2022, Florida law generally required full Replacement Cost settlement on covered roof losses regardless of roof age, and most carriers paid that way. The result was a market where older roofs were a near-impossible underwriting risk and many carriers either stopped writing aged roofs or non-renewed them at the next annual cycle. The December 2022 Special Session A passed SB 2-A in response, and one of its changes was to authorize carriers to file roof loss settlement schedules that pay older roofs on an Actual Cash Value basis.

Carriers in 2026 have filed those schedules at a wide range of cutoffs. Common patterns include full RCV for roofs under 10 years, RCV for roofs under 15 years on metal or tile, and ACV settlement for any roof beyond the carrier's threshold. The schedule has to appear as a specific endorsement on the policy, and the declarations page should reference it. A roof that settles ACV under such a schedule pays out at the depreciated number for the entire roof loss, not just the worn portion. A new roof installed before a hurricane on a policy with the ACV roof schedule still settles based on roof age, but the depreciation hit on a one-year-old roof is small.

Two related rules cut the other way for homeowners. First, an insurer may not refuse to issue or refuse to renew a homeowners policy solely because of the age of a roof that is less than 15 years old. A roof at 12 years cannot be non-renewed for age alone if it is otherwise in serviceable condition. Second, under § 627.7011, if a roof deductible under § 627.701(10) applies to the loss, the carrier may hold back the roof payment to ACV until the policyholder provides reasonable proof of payment of the roof deductible. A canceled check, money-order receipt, credit-card statement, or executed financing contract for the deductible all qualify. The provision exists to discourage roofers from waiving deductibles, not to deny the claim.

Personal Property: HO-3 Often Defaults to ACV

The dwelling rules are only half the story. Coverage C (personal property) is settled separately, and the basis depends on the policy form and the carrier. HO-5 Comprehensive Form policies typically pay personal property on RCV automatically. HO-3 Special Form policies in Florida are split: some carriers write the HO-3 with personal-property RCV built in; others write it on ACV by default and require the Personal Property Replacement Cost endorsement for an additional premium. The endorsement is usually inexpensive, but it is not automatic.

The dollar gap on a contents claim is the same math as on the dwelling: full replacement at current prices vs. the depreciated number based on item age and useful life. A burglary that takes a five-year-old laptop, a four-year-old TV, an eight-year-old camera body, and a stack of designer clothes can come back as a $7,200 ACV check on a $14,000 RCV total. The difference is your problem unless the policy includes Coverage C RCV.

Sub-limited categories add another wrinkle. Jewelry, watches, firearms, silverware, fine art, and money are capped on both HO-3 and HO-5 forms regardless of whether the broader Coverage C is RCV or ACV. A $15,000 ring stolen from an HO-3 with a $1,500 jewelry sub-limit settles for $1,500 even on an RCV policy. The fix is a Scheduled Personal Property endorsement (a personal articles floater) that lists the item, attaches an appraisal, insures on an agreed-amount basis, and removes the sub-limit. Scheduling is the only way to genuinely cover high-value items, RCV or otherwise.

How Recoverable Depreciation Actually Works

On a partial-loss RCV claim, the depreciation portion is held back at first. You receive the ACV payment with the loss letter, you start the repair, and you submit the proof of completion to release the rest. The process has a few moving parts that policyholders frequently miss, and every missed step is real money that goes uncollected.

• check_circleThe cover letter accompanying the ACV check itemizes the replacement cost, the depreciation amount, the ACV payment, and the recoverable depreciation balance. Read the letter; do not assume the check is the final settlement.
• check_circleHire a licensed Florida contractor and complete the repair. The carrier will not release recoverable depreciation for work the policyholder pockets the ACV on and never performs.
• check_circleSubmit paid invoices, signed work orders, change orders if applicable, and photographs of the completed repair. Most carriers want copies of canceled checks or credit-card statements showing the contractor was paid.
• check_circleWatch the deadline. Most Florida policies require the recoverable depreciation claim within 180 days to one year of the original loss payment. Some carriers extend the window with a written request; many do not. The deadline lives in the loss settlement section of the policy.
• check_circleIf the repair came in higher than the original estimate (common in Florida after a named storm because of demand surge), file a supplemental claim. Recoverable depreciation is capped at the depreciation amount on the original loss; the cost overrun above replacement cost is a separate negotiation supported by the new invoices.
• check_circleConfirm in writing when the final payment posts. The recoverable depreciation balance and any supplemental payment should both appear on the loss summary the carrier sends after the file closes.

Which Coverage Settles How: The Whole Picture

What RCV vs. ACV Costs in 2026

Across most Florida carriers, the premium difference between RCV and ACV settlement on Coverage A runs roughly 10 to 25 percent of the dwelling premium. On a Florida policy where most of the premium is wind, that single-digit-percent-to-low-double-digit difference is often a few hundred dollars a year. The depreciation gap on a single roof or contents loss almost always dwarfs that premium spread, and an RCV policy is what most Florida lenders require on a mortgaged home anyway. Going ACV is rarely the right answer except on a fully owned secondary structure, a manufactured home with a thin private market, or a Citizens placement where the form is what the form is.

The roof schedule is its own calculation. Some carriers offer two roof-settlement options on the same policy: a lower-premium ACV roof schedule that pays depreciated value on any roof loss, or a full-premium RCV roof that pays replacement cost. The premium difference on the roof endorsement alone can be a few hundred to over a thousand dollars a year on an older roof, and the math swings hard with the age of the existing roof and the climate exposure of the address. The cleaner play for a homeowner with a roof under 10 years is to keep RCV on the roof and pay the premium. For a roof at the carrier's age limit, the realistic comparison is between an ACV roof endorsement on the current carrier and a different carrier that will write a full RCV roof at higher overall premium.

The Bottom Line

Replacement Cost Value pays the cost of putting the damage back the way it was, at current prices, without subtracting for age. Actual Cash Value pays Replacement Cost minus depreciation for age, condition, and useful life. Florida Statute § 627.7011 forces every carrier to offer RCV at policy issue, pays partial dwelling losses initially at ACV with the depreciation released as the repair is completed, and pays total dwelling losses at full Replacement Cost without holdback. SB 2-A authorized roof schedules that settle aged roofs at ACV, and most Florida carriers in 2026 use them somewhere on the policy at roof ages above 10 to 15 years. Personal property settlement on HO-3 policies splits between carriers; an HO-5 almost always carries RCV by default. The single-page summary for the homeowner is short: read the loss settlement clause and any roof endorsement, keep Coverage A on RCV, look for the Personal Property Replacement Cost endorsement on an HO-3, schedule anything above the standard sub-limits, and replace the roof before it crosses the carrier's age threshold. The premium difference between RCV and ACV is small compared to the depreciation gap on a single claim, and that gap is the entire reason these two letters matter on a Florida policy.