Texas homeowners · How the check is calculated
Replacement cost versus actual cash value
Replacement cost pays to repair or replace with similar materials, without subtracting for age, if you meet the policy’s conditions. Actual cash value pays that same replacement cost minus depreciation. The deductible comes off either way. On a Texas hail roof, that difference is the whole claim.
Related: Texas homeowners products and buying home insurance in Texas.
Depreciation is the age deduction
A twelve-year-old roof does not get a new-roof price under actual cash value. The carrier prices a new roof, then subtracts a percent for the years it has been up. You pay the deductible and you pay that depreciation gap. Replacement cost can still pay the depreciated amount first. The rest, called recoverable depreciation, is released after you do the work and send invoices, inside the time the form allows. If you take the first check and do not repair, you usually do not get the rest. That holdback is not a second deductible. It is the policy waiting to see that you replaced the roof.
Many forms only give replacement cost on the dwelling if you insure it for at least a stated share of rebuild cost, often 80 percent. Insure for less and a partial loss can settle at actual cash value even if the brochure said replacement cost. Personal property is a separate choice. Contents can be actual cash value while the house is replacement cost. Read both lines on the declarations.
The roof endorsement is where Texas quotes diverge
A roof-surface endorsement that switches settlement to actual cash value is a common way a premium drops. It is also how two quotes that look similar are different products. Ask, in words, “After hail, do you pay replacement cost or actual cash value on the roof?” Then ask what the deductible is in dollars. A percentage hail deductible applies before either settlement method. Flood is still excluded. Flood maps. What else moves the price: cost factors and ways people try to lower it.
