Calculators
ACV vs RCV claim payout calculator
On a replacement-cost policy the first payment is commonly issued at actual cash value, with the withheld depreciation released after repairs are completed and documented. This shows both numbers so the first cheque is not mistaken for the settlement.
The formula
ACV = replacement cost − depreciation. First cheque = ACV − deductible. Recoverable depreciation = replacement cost − ACV, released after documented repair.
Worked example
A $20,000 replacement cost, 30% depreciation and a $1,000 deductible gives an ACV of $14,000, a first cheque of $13,000, and $6,000 of recoverable depreciation released once the work is done and evidenced.
Reference table
| Replacement cost | 10% dep. | 25% dep. | 40% dep. |
|---|---|---|---|
| $5,000 | $3,500 | $2,750 | $2,000 |
| $10,000 | $8,000 | $6,500 | $5,000 |
| $20,000 | $17,000 | $14,000 | $11,000 |
| $50,000 | $44,000 | $36,500 | $29,000 |
The balance is recoverable depreciation, released after the repairs are completed and documented.
Assumptions
- This models a replacement-cost policy. On an actual-cash-value policy there is no recoverable depreciation to release.
- Depreciation is applied by the adjuster per item and per material, not as one flat rate across the loss. A single percentage here is a simplification.
- Some policies apply the deductible once per claim, others per coverage. Check your declarations page.
- Mitigation and repair are frequently estimated and paid separately, so this may describe only one phase of your claim.
What to do with this number
The most common mistake this calculator exists to prevent is treating the first cheque as the settlement. On a replacement-cost policy it usually is not: it is actual cash value less the deductible, with the depreciation held back until the repairs are done and evidenced. A homeowner who banks that cheque and stops there leaves the recoverable depreciation unclaimed.
To release it you generally have to complete the work and show that you did — invoices, receipts, photographs of the finished repair. There is often a time limit written into the policy for claiming it, and it is one of the easiest entitlements to lose by simply not asking. Ask your adjuster in writing what evidence they need and by when.
If your own figure and the adjuster's differ sharply, the disagreement is usually about the depreciation rate or the scope rather than the arithmetic. Depreciation should be applied per item and per material, not as one flat rate across the loss, and a schedule showing how it was calculated is a reasonable thing to request. Most policies also contain an appraisal clause for resolving a valuation dispute without litigation — worth reading before the argument escalates.
How coverage is actually decided on a water loss
Coverage on a standard homeowners policy turns on two questions, and neither of them is how much water there was. The first is whether the event was sudden and accidental. The second is whether the water came from inside the building or from outside it. A supply line that bursts is sudden and internal, and it is the most common covered claim there is.
Gradual damage is treated differently: a leak that ran behind a wall for months is usually excluded as a maintenance issue, because the policy covers events rather than deterioration. External rising water is excluded as flood and needs a separate policy through the National Flood Insurance Program or a private insurer, typically after a 30-day waiting period. Backup through a sewer or drain is excluded from the standard form and needs its own endorsement, which most homeowners do not have and do not know they do not have. No page can tell you whether your specific claim will be paid — but knowing which of those four doors your loss walked through tells you what the adjuster is evaluating.
What to document before anything moves
The documentation that decides a claim costs nothing but the ten minutes it takes, and it cannot be recreated later. Photograph wide first so the room and the extent are established, then photograph the source of the loss itself — the split line, the failed connector, the stain where water entered. Cause drives coverage far more than the amount of damage does, so the picture of the failure is worth more than the picture of the puddle.
Then photograph the water line on the walls, the spread across the floor, and each affected item with its model and serial number legible. Keep receipts for anything bought because of the loss. Ask the restoration firm for the daily moisture readings and equipment log at the start of the job rather than the end — those are the documents that settle an equipment billing dispute, and a competent firm produces them anyway. Above all, do not throw damaged property away until the adjuster has seen it or authorised disposal in writing.
Sources (2)
- Insurance Information Institute — Understanding your insurance deductible / water damage coverage (accessed 2026-08-17)
- FEMA / NFIP — NFIP Claims Handbook (accessed 2026-08-17)