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Actual cash value vs. replacement cost: compare home insurance quotes

Compare roof, dwelling and belongings settlement terms before comparing premiums. See a labeled roof-payment example and request coverage-specific quotes.

Reviewed 2026-10-14How we reviewSuggest a correction
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Ask how each property section settles a covered loss. Dwelling, roof and belongings terms may need separate answers. A lower premium alone does not describe the amount you would pay or receive after a loss.

Use the comparison worksheet ↓Need quotes first? Prepare your request ↓

Put the scope side by side

Keep settlement and deductible questions separate
CompareOne home quoteAnother home quoteWhat to confirm
Dwelling limit and basisStated insured amount and settlement termsStated insured amount and settlement termsAre the home details and reconstruction assumptions comparable? The mortgage balance or market price does not answer that question.
Roof and belongingsIdentify terms for each sectionIdentify terms for each sectionDoes depreciation apply? Are special roof provisions, schedules or belongings sublimits different?
Ordinary deductibleStated dollar amount or percentage basisStated dollar amount or percentage basisWhich losses use this deductible, and what amount is the percentage applied to?
Special deductibles and exclusionsWind, hail, named-storm and other termsThe corresponding terms and triggersWhich separate deductibles, excluded causes or endorsements apply to this exact policy?
Roof payment conditionsInitial payment and any recoverable amountInitial payment and any recoverable amountWhich evidence and deadlines apply? Do not treat the unpaid balance as automatically recoverable.

ILLUSTRATIVE EXAMPLE · NOT MARKET PRICES

A percentage deductible needs its stated basis

Invented arithmetic example: one policy states a 2% deductible based on a $400,000 insured dwelling amount for a specified event. Another states a $2,500 flat deductible for that same event. This assumes those are the actual policy terms.

Percentage example: $400,000 × 2% = $8,000. Flat example: $2,500. Deductible difference: $5,500.

This does not calculate a claim payment. The policy trigger, coverage, valuation, limits and actual loss still matter. Do not apply a percentage to the repair bill or market value unless that is the stated policy basis.

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Ask how each home policy values a covered loss

Replace the bracketed details, then use the same request with each company you are considering. Keep their written answers beside the quote.

Read the request before copying
I am comparing homeowners proposals with an intended effective date of [date]. I will provide property and personal details through your secure quote process.
Please identify the relevant policy forms or endorsements and explain:
1. Settlement basis for the dwelling, roof, belongings and other structures separately, including any roof payment schedule.
2. Limits, sublimits and exclusions that differ between the proposals.
3. Each deductible, the peril that triggers it and the dollar basis of any percentage.
4. Any depreciation-recovery process, required documents, deadlines and conditions for later payments.
5. The basis of the dwelling replacement estimate.
Please provide the premium, policy period, fees, discounts, quote expiration and unresolved items. Identify differences from my requested coverage before I compare prices.
Please identify any functional-replacement wording and any ordinance-or-law coverage, including limits, conditions and the relevant policy forms.
Please identify roof-age schedules and show any alternative settlement basis you can quote using the same property details, limits and effective date. Mark every coverage or deductible change beside its premium. Do not assume my roof age if I have marked it unknown.

Copying does not send a request. Share personal details through your chosen provider’s secure quote process.

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Copy your prepared request for your conversations with providers. Continue to tell us what you need and choose how our team should follow up. Your edits here are not sent automatically.

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Open the comparison worksheetEnter the quotes you have. Keep unanswered items as questions for your provider.

COMPARE MORE THAN THE PRICE

What happens if…?

Choose what each policy says about the situations below. “Not sure” becomes a question to ask your provider. Add exact limits or deductibles only if you know them.

Optional · Saves prices and notes in this browser tab for 30 minutes after an edit. They are not sent to us or a provider. Uncheck to remove the saved copy.

Saving is off. Without a saved copy, leaving or reloading clears your entries.

Add quoted prices and policy periods (optional)
Option A
Option B

Enter each complete quoted premium. Fees outside that premium are not included here. Shorter terms are annualized assuming unchanged renewals.

Repairing or rebuilding your home

Dwelling · The insured building, for covered causes of loss.

Option A: add limits or notes
Option B: add limits or notes

Reconstruction cost is different from market value or mortgage balance.

Damage to your roof

Roof · Roof damage under the stated policy terms. Record this separately from the general dwelling terms.

Option A: add limits or notes
Option B: add limits or notes

Copy any roof valuation schedule, depreciation terms, and wind, hail or named-storm deductible with its trigger and percentage basis.

Replacing your belongings

Personal property · Covered belongings, subject to limits and exclusions.

Option A: add limits or notes
Option B: add limits or notes

Compare replacement-cost versus depreciated-value settlement and sublimits.

Injuries or damage you cause

Liability · Certain covered claims for injury or property damage to others.

Option A: add limits or notes
Option B: add limits or notes

Check limits, exclusions and any separate umbrella coverage.

Living elsewhere while your home is repaired

Loss of use · Eligible extra living expenses after a covered loss.

Option A: add limits or notes
Option B: add limits or notes

Check dollar and time limits.

Flood or earthquake damage

Flood / earthquake · Often require separate coverage or an endorsement.

Option A: add limits or notes
Option B: add limits or notes

Do not assume a standard homeowners policy covers these perils.

0 of 12 policy items noted. This is a worksheet, not a coverage score. Your notes stay in this page, including when you switch between car and home.

Policy language, endorsements and state requirements determine coverage. This worksheet compares your entries; it does not interpret policy wording, establish adequate limits or select a policy. For home insurance, check roof, dwelling and belongings settlement separately and use the policy's stated basis for any percentage deductible.

Sources: NAIC: Homeowners insurance consumer guide ↗ Checked October 12, 2026. Methodology v1.1.

Questions to take to your provider

  1. How do the dwelling, roof and belongings each settle a covered loss?
  2. Which event triggers each deductible, and what is any percentage based on?
  3. What exclusions or endorsements explain the difference between these proposals?
  4. For the roof, can you show how the quoted settlement basis and deductible would apply in a clearly labeled example?

Use these with the companies you are already considering. Ask for written answers so you can compare the same work or coverage.

Questions covered in this guide

What do replacement cost and actual cash value mean?

Replacement-cost coverage generally concerns replacement with similar kind and quality under the policy’s terms. Actual cash value accounts for depreciation. NAIC’s explanation describes this distinction. Neither label by itself promises payment for every loss or guarantees that the insurer will pay every contractor charge. Limits, deductibles, exclusions and settlement conditions still matter.

Does functional replacement mean the same materials?

NAIC’s Post-Disaster Claims Guide, page 16, distinguishes functional replacement from restoring the same quality and craftsmanship. Its example includes drywall replacing plaster. Ask whether this wording appears in the offered policy and what it would mean for your home’s materials. Record the relevant form beside the premium before comparing proposals.

Would required building-code upgrades be covered?

NAIC’s guide, page 17, treats ordinance-or-law coverage as a separate question when repairs must meet current building codes. Ask whether that coverage is included, its limit and conditions, and which additional repair costs it addresses. A dwelling limit or replacement-cost label alone does not answer those questions. Request the applicable wording from the insurer.

Can the roof, dwelling and belongings have different terms?

Ask for the settlement basis for each property category rather than accepting one “replacement cost” label for the whole policy. Have the provider point to the relevant forms or endorsements for:

  • The dwelling and any special roof provisions or payment schedule.
  • Personal belongings and any replacement-cost endorsement.
  • Other structures and applicable sublimits or exclusions.
  • Conditions, documentation or deadlines attached to additional payments.

Record the actual terms beside each quote. A declaration-page limit does not explain all the conditions that can affect settlement.

How do you turn a percentage deductible into dollars?

Confirm both the triggering peril and the amount the percentage applies to. In the example above, 2% of a $400,000 dwelling limit is $8,000. Compared with a $2,500 flat deductible for the same modeled loss, the difference is $5,500. If the contract uses a different basis or deductible for that peril, use that provision instead. NAIC’s homeowners guidance explains percentage deductibles. Multiplying the percentage by a repair estimate can be wrong when the policy specifies the insured value.

Does replacement cost mean the entire amount is paid immediately?

Ask the provider to describe the payment process in writing. If a proposal allows depreciation to be recovered after work is completed, confirm the evidence, timing, limits and other conditions that apply. Do not assume a second payment is automatic, and do not treat the difference between a repair bill and an initial payment as proof that the whole difference is recoverable. The policy and the facts of the claim determine that question.

How do you compare proposals without predicting a payout?

Keep three questions separate: what property and causes of loss are covered, how a covered loss is valued, and what deductible applies. Ask the insurer to explain the dwelling replacement estimate rather than substituting the home’s sale price or mortgage balance. Use the home coverage worksheet to record differences and the homeowners shopping guide to prepare follow-up questions. A lower premium may accompany different terms; the worksheet cannot decide coverage or a future claim payment.

What can roof depreciation change in dollars?

NAIC’s roof coverage explanation separates replacement-cost settlement from settlement that accounts for depreciation. Here is our own simplified arithmetic: suppose a covered roof loss has $18,000 of accepted replacement cost, $6,000 of assumed depreciation and a $2,000 deductible. Under the modeled ACV terms, $18,000 − $6,000 − $2,000 = $10,000. Under the modeled replacement-cost terms, after all recovery conditions are met, the total is $18,000 − $2,000 = $16,000. The modeled difference is $6,000. These invented inputs assume adequate limits and no other reductions; they are not a quote, coverage decision or prediction of a claim.

Why can the first check look the same under different policies?

An initial depreciated payment does not by itself tell you whether depreciation is recoverable. Record the initial payment, any amount described as potentially recoverable, the required evidence and the deadline separately. Ask the insurer to identify the actual provision. The amount missing from a contractor invoice can also involve a deductible, uncovered work or a disagreement about scope, so it is not automatically a later payment. For recordkeeping after a loss, see the recoverable depreciation guide.

What should your quote request say before you share the premium comparison?

Ask the agency or insurer to label roof, dwelling and belongings terms separately, identify the wind or hail deductible, and explain any age-based roof schedule. Provide the roof age as known or unknown; do not guess it to obtain a price. Ask for alternative available coverage with the same property details and effective date, with any changed limits or deductibles clearly marked. A less expensive premium is not an equivalent-coverage saving when settlement terms differ.

Request quotes for the coverage you mean

Use the home coverage comparison to organize what you have, then start a homeowners insurance quote request with your state, shopping timing and contact preference. Ask for the settlement terms above with the actual premium. Coverage and eligibility must be confirmed by the agency or insurer; sending a request does not bind a policy or promise savings.

Putting it into practice

The existing deductible example is supplemented by a separate modeled roof settlement. This distinguishes premium, initial cash payment and conditional recovery, while the quote request keeps roof age and coverage differences explicit. The arithmetic is an illustration with stated assumptions, not a payable claim estimate.

Sources and supported claims

NAIC advises reviewing coverage features and deductibles when shopping for homeowners insurance.
Source ↗ · national · Checked 2026-10-12

NAIC explains that named-storm deductibles have specific triggers and may differ from the ordinary homeowners deductible.
Source ↗ · national · Checked 2026-10-12

NAIC distinguishes replacement cost coverage from actual cash value, which accounts for depreciation.
Source ↗ · national · Checked 2026-10-13

NAIC explains fixed and percentage homeowners deductibles, settlement differences and the need to review policy exclusions.
Source ↗ · national · Checked 2026-10-13

NAIC’s claims guide distinguishes functional replacement materials and ordinance-or-law coverage for code-related repair costs; actual policy terms control.
Source ↗ · national · Checked 2026-10-13

NAIC distinguishes roof replacement-cost and actual-cash-value settlement, illustrates depreciation and deductibles, and advises checking wind and hail coverage and separate deductibles.
Source ↗ · national · Checked 2026-10-14

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