Why is my first check less than the full repair cost?

Your first check is the ACV — actual cash value — which deducts depreciation from replacement cost. On RCV policies, the remainder is released after work is completed. Your deductible also comes out of the first payment. This is normal and expected on virtually every RCV claim.

What is O&P and why might it be missing?

Overhead and profit is the contractor's margin — typically 10% overhead and 10% profit. Insurers sometimes exclude it from the initial estimate for jobs they expect to be done by homeowners or small operators. When a general contractor or restoration company is involved, O&P is generally owed. We include it in every supplement when it's missing.

How long does it take to get the depreciation holdback?

After you submit your completion invoice and supporting documentation, most insurers release holdback within 10–30 days. NC law requires reasonably prompt payment, though the specific timeline for recoverable depreciation varies by policy.

What if my settlement doesn't cover the full cost?

There are three common reasons: (1) items are missing from scope and need to be supplemented, (2) depreciation was applied more aggressively than your policy allows, or (3) your policy has exclusions or coverage gaps. We review settlements and identify supplementable items at no charge before work begins.

Do I owe my contractor the full RCV or just the ACV?

You owe your contractor the full job cost. On an RCV policy, the insurer pays ACV first and releases depreciation after completion. Your out-of-pocket is your deductible — the difference between what the insurer pays (in total) and the full job cost. You don't pay the depreciation out of pocket; the insurer eventually does.

Insurance Claims — Settlement Guide

How to read your roof insurance claim settlement.

The first check from your insurer is almost never the full amount. Understanding the difference between ACV and RCV — and how depreciation holdback works — means you know what to expect and what to do next.

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The Core Concept

ACV vs RCV — the two numbers that define your settlement.

FIRST CHECK

ACV — Actual Cash Value

What your roof is worth today, accounting for age and wear. A 15-year-old roof with a 25-year expected lifespan might be valued at 40% of replacement cost. This is the first check you receive. It covers less than the full replacement.

FULL COVERAGE

RCV — Replacement Cost Value

What it costs to replace your roof with like kind and quality today, regardless of age. Most homeowner policies are RCV policies. The difference between ACV and RCV is held back as depreciation — and released after work is completed.

If your policy is ACV-only (not RCV), the first check is the final check. Call your agent and confirm your policy type before work begins.

Depreciation

The withheld amount — and how to get it released.

Depreciation holdback is the gap between your ACV payment and the full RCV. Insurers withhold it until work is completed and you submit proof. Once your contractor finishes the job and you provide the completion invoice, the insurer releases the remaining balance — sometimes called “recoverable depreciation.”

Example Calculation

Full RCV$18,500

Less depreciation−$5,200

ACV (first check)$13,300

Less deductible−$2,500

Net first check$10,800

Released after completion+$5,200

Total insurance pays$16,000

Your out-of-pocket$2,500 (deductible only)

Reading the Document

What the line items actually mean.

Remove & Replace (R&R)

Labor and materials to tear off existing roofing and install new. The core line item on every roof replacement estimate.

Detach & Reset (D&R)

Items removed and reinstalled without being replaced — common for gutters, satellite dishes, and solar panels.

O&P (Overhead & Profit)

Contractor margin — typically 10% overhead and 10% profit. Sometimes excluded from initial estimates and added on supplement when a restoration contractor is involved.

Sales Tax

Tax on materials. Often missing from the initial adjuster estimate and recovered via supplement.

Supplemental Items

Items your contractor documented that weren't included in the adjuster's original scope — code upgrades, additional damaged components, missed line items.

Non-recoverable Depreciation

Depreciation the insurer will not release even after completion. More common on older roofs or ACV-only policies. Confirm your policy type before work begins.

Next Steps

You received the settlement letter. Here's what to do.

Don't cash the check immediately

Review the scope first. If your contractor believes items were missed, submitting a supplement before work begins is cleaner than fighting for additional funds afterward.

Compare with your contractor's scope

Go line by line. Differences in material quantities, missing line items, and O&P gaps are normal and addressable.

Sign the contract and schedule the work

Once scope is aligned (or supplemented), work can begin. You will pay your deductible to the contractor.

Submit proof of completion

After work finishes, submit the contractor's invoice and completion photos to your insurer to trigger depreciation release.

Receive the holdback

The recoverable depreciation check arrives, completing the claim. Total insurance payout equals ACV plus released depreciation.

Common Questions

What homeowners ask us about settlements.

We review settlements before work begins — at no charge.

Bring us your settlement letter. We'll go through it line by line, identify what's missing, and submit supplements before a single shingle is touched.

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Need help from the beginning? We guide you through the full claim process.

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