Replacement Cost Value (RCV) is the amount it would cost today to replace damaged property with new materials of like kind and quality — without subtracting for age or wear.
If your policy is an RCV policy, the insurer typically pays you the ACV first and then the depreciation holdback (the difference between ACV and RCV) once you've completed the repairs and submitted invoices showing you spent at least that amount.
Why this matters
Roofers will quote you the RCV. Your insurer's first check often reflects only the ACV. The gap between those two numbers is what you're entitled to recover if you actually complete the work.
Example
Replacement Cost: $20,000. ACV: $12,500. Deductible: $2,500.
- First check: $10,000 (ACV − deductible)
- Second check after repairs: $7,500 (depreciation recovered)
- Total recovered: $17,500 (the full $20,000 minus your deductible)