After a North Texas hailstorm, a roof question we often hear is simple: “Why is this check so small?” The answer usually sits in one policy line: is your roof settled at replacement cost or actual cash value? That decides whether money taken out for depreciation can come back after the work is done or simply stays subtracted.
Here’s what changes at claim time under each, using TDI’s own examples, how a percentage deductible fits in, and what to check before spring. For the wider picture, see our Texas homeowners coverage guide.
By clicking Get My Free Quote, I give Robinson Legacy Partners LLC, an Allstate agency, and its licensed agents my prior express written consent, by electronic signature, to contact me with calls and text messages — including marketing calls and texts made using automated technology or an artificial or prerecorded voice — and by email, at the number and email I provided, about my insurance quote and related insurance products and services, even if my number is on a Do Not Call list. My information is never sold or shared with other agencies for their own marketing. Consent is not a condition of purchase; I can call (817) 262-5300 instead. Message frequency varies. Message and data rates may apply. Reply STOP to opt out, HELP for help. I agree to the Privacy Policy and Terms of Use, including the arbitration clause and E-SIGN consent.
What changes at claim time when your roof is replacement cost or actual cash value?
The short answer: Replacement cost pays what the roof costs to replace today minus your deductible, while actual cash value also subtracts depreciation for age and wear, so the same storm pays less on an older roof.
The Texas Department of Insurance’s home insurance guide (updated June 1, 2026) puts it simply: “Replacement cost coverage pays to repair or replace your house and personal property at current prices,” and “Actual cash value coverage pays replacement cost minus depreciation.” TDI’s replacement cost tip adds the trade-off: actual cash value policies cost less, “but they also pay less when you have a claim.”
| At claim time | Replacement cost | Actual cash value |
|---|---|---|
| Starting point | Today’s cost to replace the damaged roof | The same estimate |
| Subtracted | Your deductible; depreciation is held back at first | Depreciation and your deductible |
| How it’s paid | Usually two checks | The depreciated amount |
| Depreciation paid later? | YesAfter the company gets the bill for the finished job, within the policy’s time limit | Not describedTDI defines it as replacement cost minus depreciation and describes the second check only for replacement cost |
| Older, worn roof | Same total in TDI’s example$6,000 at 5, 10 or 20 years; more depreciation is held back until the work is done | Pays lessCan pay nothing once the deductible is taken out |
How is depreciation figured on a Texas roof claim?
The short answer: The adjuster estimates how much value the roof has lost to age and wear, and TDI notes many policies reduce roof coverage based on the roof’s age and materials.
TDI defines depreciation as “a decrease in value because of wear and age,” and the NAIC says companies “usually calculate depreciation based on the condition of the property when it was lost or damaged” (NAIC, 2021). Material matters too: TDI’s March 2026 roof column says “many policies reduce coverage based on your roof’s age and materials,” and its metal roof guide (August 10, 2026) says that reduction is usually slower for metal than for shingles.
| Roof age | Replacement cost pays | Actual cash value of roof | Actual cash value pays |
|---|---|---|---|
| 5 years | $6,000 | $8,500 | $4,500 |
| 10 years | $6,000 | $7,000 | $3,000 |
| 20 years | $6,000 | $4,000 | $0 |
When clients bring us a claim estimate, the first line we look for is depreciation, because that number is the whole difference between the two settlement types.
When do you get held-back depreciation on a replacement cost roof?
The short answer: TDI says most companies pay replacement cost claims with two checks, and the depreciation kept from the first is paid after the company gets the bill for the finished job.
According to TDI’s home insurance guide:
- First check. It comes after the adjuster has looked at the damage and “will be for the estimated cost of repairs, minus depreciation and your deductible.”
- Second check. The company pays “the amount it kept for depreciation after it gets the bill for the finished job.”
- A deadline. “You usually must complete repairs within a certain period of time.” TDI says to ask your agent or adjuster how long you have.
TDI’s roof tip (April 1, 2026) says the rest comes “after you’ve started repairs,” so your policy sets the exact trigger.
How does a percentage wind and hail deductible change roof claim math?
The short answer: Your deductible comes off under either settlement type, and a percentage deductible is figured on the home’s insured value, so 2% of a $300,000 dwelling limit is $6,000.
Wind and hail deductibles are usually percentages, “typically from 1 percent to 5 percent” of insured value (III). TDI’s deductibles tip (October 14, 2024) shows why that matters for roofs: two homes are insured for $150,000, and hail does $6,500 of roof damage. Policy A, with a $500 deductible, pays $6,000. Policy B, with a 5% deductible, or $7,500, “would not pay anything.”
See how Texas wind and hail deductibles are figured for more. Here’s how deductible and depreciation stack up:
- Replacement cost, 2% deductible ($6,000): first check $4,800 ($18,000 − $7,200 − $6,000); second check $7,200 after the finished job. Policy pays $12,000; you pay $6,000.
- Actual cash value, 2% deductible: policy pays $4,800; you pay $13,200.
- Actual cash value, 1% deductible ($3,000): policy pays $7,800; you pay $10,200.
By clicking Get My Free Quote, I give Robinson Legacy Partners LLC, an Allstate agency, and its licensed agents my prior express written consent, by electronic signature, to contact me with calls and text messages — including marketing calls and texts made using automated technology or an artificial or prerecorded voice — and by email, at the number and email I provided, about my insurance quote and related insurance products and services, even if my number is on a Do Not Call list. My information is never sold or shared with other agencies for their own marketing. Consent is not a condition of purchase; I can call (817) 262-5300 instead. Message frequency varies. Message and data rates may apply. Reply STOP to opt out, HELP for help. I agree to the Privacy Policy and Terms of Use, including the arbitration clause and E-SIGN consent.
Will a Texas policy pay for cosmetic hail dents or mismatched shingles?
The short answer: Not always, because some policies exclude cosmetic damage that doesn’t affect how the roof works, and TDI says a company might not replace a whole roof just because new shingles don’t match.
TDI’s metal roof guide warns that a metal roof discount “might come with conditions like an exclusion for cosmetic damage,” and explains: “This means if something damages the way the roof looks, but it still functions, your insurance won’t pay to fix it.” TDI’s column adds that “your company might not pay to replace the entire roof, even if the new shingles don’t match the old ones perfectly.”
Replacement cost or actual cash value
Decides whether depreciation is paid back after the work is done.
Roof coverage reductions
TDI says many policies reduce roof coverage by age and material.
Dents that don’t leak
An exclusion can leave appearance-only damage unpaid.
Wind and hail, in dollars
Often a percentage; it comes off before any check.
Why might your roof be switched to actual cash value at renewal?
The short answer: TDI says that as roofs age, some companies switch them to actual cash value, so a roof settled at replacement cost when it was newer may be settled differently a few renewals later.
That’s TDI’s wording in its roof tip: “As roofs age, some companies will switch to actual cash value.” It adds, “Your company should tell you when they change your coverage.” TDI’s metal roof guide adds that terms “could change at renewal time.”
At renewal reviews, the roof settlement line is one of the first things we compare with last year’s declarations page. Whether a company can decline or non-renew a policy over roof age is a separate question, covered in our guide to keeping Texas home insurance with an older roof. If the price jumped too, see what drives a higher Texas home renewal.
What should you check on your declarations page before storm season?
The short answer: Find how your roof is settled, every deductible in dollars, any cosmetic or roof-age wording, and the roof year and material on file, then fix gaps before spring hail.
Texas had 902 major hail events (one inch or larger) in 2025, the most of any state (III, citing NOAA). Texas Insurance Code § 2301.056 requires a residential policy’s declarations page to list each type of deductible and state its exact dollar amount, and TDI’s declarations page guide notes a home policy may show a separate wind and hail deductible.
- Find your roof settlement terms
Look for replacement cost or actual cash value on the declarations page and in any roof endorsement.
- Write every deductible in dollars
List the wind and hail deductible separately from the all-other-perils deductible.
- Look for cosmetic-damage wording
Check endorsements and renewal notices for exclusions on appearance-only damage.
- Confirm your roof’s age and material
Make sure the policy matches your roof, especially after a replacement.
- Check your dwelling limit
It should reflect what it would cost to rebuild your home today.
- Review the numbers with your agent
Ask what a full roof claim would pay today, in dollars, before storm season.
On step 5, TDI says “most companies require you to insure your house for at least 80% of its replacement cost.” See how much to insure a Texas home for and our coverage-gap review guide.
What can you do if you disagree with a roof claim payment?
The short answer: Ask the adjuster to walk through the estimate, send anything missing, use your policy’s appraisal provision if the dispute is over the amount, and contact TDI if something looks wrong.
- Go line by line. Compare the adjuster’s estimate with your roofer’s, especially depreciation and anything left out.
- Appraisal for amount disputes. Senate Bill 458 (2025) added Insurance Code chapter 1813, requiring residential property policies to contain an appraisal provision “solely to determine the amount of loss” in a dispute. It applies to policies “delivered, issued for delivery, or renewed on or after January 1, 2026” (enrolled bill).
- Get help from TDI. Call TDI’s help line at 800-252-3439 or file a complaint.
In Arlington? Our Arlington homeowners guide covers local storm history. See also our home insurance page.
The bottom line
Replacement cost and actual cash value start from the same roof estimate. Replacement cost holds depreciation back and pays it after the work is done; actual cash value subtracts it. Add a percentage deductible, a cosmetic exclusion or a switch at renewal, and neighbors with the same hail can get very different checks.
Robinson Legacy Partners is an Allstate agency in south Arlington. Send us your ZIP below or call (817) 262-5300, and we’ll find your roof terms, put your deductibles in dollars and show you what a roof claim would pay, in any of our seven languages, Monday through Friday from 8:30 to 5.
By clicking Get My Free Quote, I give Robinson Legacy Partners LLC, an Allstate agency, and its licensed agents my prior express written consent, by electronic signature, to contact me with calls and text messages — including marketing calls and texts made using automated technology or an artificial or prerecorded voice — and by email, at the number and email I provided, about my insurance quote and related insurance products and services, even if my number is on a Do Not Call list. My information is never sold or shared with other agencies for their own marketing. Consent is not a condition of purchase; I can call (817) 262-5300 instead. Message frequency varies. Message and data rates may apply. Reply STOP to opt out, HELP for help. I agree to the Privacy Policy and Terms of Use, including the arbitration clause and E-SIGN consent.
Roof replacement cost and actual cash value FAQ
What is the difference between replacement cost and actual cash value on a Texas roof claim?
Replacement cost coverage pays to repair or replace your roof at current prices, minus your deductible. Actual cash value pays replacement cost minus depreciation, which the Texas Department of Insurance describes as a decrease in value because of wear and age, then subtracts your deductible. In TDI’s example of a 10-year-old roof that costs $10,000 to replace, a $2,000 deductible leaves you paying $2,000 with replacement cost and $5,000 with actual cash value.
How long do I have to replace my roof to get the held-back depreciation?
It depends on your policy. TDI’s home insurance guide says you usually must complete repairs within a certain period of time and suggests asking your agent or adjuster how long you have. Get that deadline in writing early. TDI says the company pays what it kept for depreciation after it gets the bill for the finished job, so send the roofer’s final invoice promptly. TDI describes this held-back payment only for replacement cost policies.
How long does a Texas insurance company have to pay a roof claim?
TDI’s home insurance guide lists the deadlines Texas law sets. A company must tell you it got your claim within 15 days, accept or deny it within 15 business days of getting all the information it needs from you, and send a check within five business days after it agrees to pay. A company that needs more time must tell you why and can take 45 days to decide. Deadlines may be longer after major disasters, and surplus lines companies and TWIA follow different timelines. On a replacement cost roof, the second check also depends on when you finish the work.
Can an actual cash value roof claim pay nothing at all?
Yes. In the Texas Department of Insurance’s example, a covered storm destroys a 20-year-old roof that costs $10,000 to replace. The house is insured for $200,000 with a 2% deductible, or $4,000. The roof’s actual cash value is $4,000, so after the deductible the policy pays $0. Replacement cost coverage would pay $6,000 on the same claim. It’s an example, not a quote, but it shows why an older roof and a percentage deductible deserve a look before storm season.
How can I tell whether my roof is covered at replacement cost or actual cash value?
Start with your declarations page, any roof endorsement and your renewal notice, and look for the words replacement cost or actual cash value. Texas law requires the declarations page to state each deductible’s exact dollar amount, so note those too. If the wording isn’t clear, ask your agent to show you how a full roof replacement would be paid. Check at every renewal, since TDI notes some companies switch older roofs to actual cash value.
Last reviewed by the Robinson Legacy Partners team on .
