Guides
Roof payment schedules and ACV roof endorsements
ACV roof endorsements and payment schedules cut what a wind or hail roof claim pays as the roof ages, for a lower premium. How each works and what to compare.
An ACV roof endorsement and a roof payment schedule do the same thing from different directions: both cut what your policy pays for wind or hail damage to the roof, and both get smaller as the roof gets older. The ACV endorsement pays replacement cost minus depreciation, with no way to recover the difference. A payment schedule pays a fixed percentage of the replacement cost taken from a table of roof age and material. Insurers sell either at a lower premium, and the trade only looks good until a storm.
Both are endorsements, so they sit on top of the base policy. This guide uses the ISO HO-3 (HO 00 03) as its model, but schedule forms are written by individual insurers. Your declarations page and endorsement list control.
Three ways a roof can be settled
| Settlement basis | What you collect on a wind or hail claim | Where it comes from |
|---|---|---|
| Replacement cost | Full cost of a like roof, less the deductible. Depreciation is withheld first and released when the work is done | The base HO-3 loss settlement condition |
| Actual cash value (ACV) roof | Replacement cost minus depreciation for age and condition, less the deductible. The depreciation stays unpaid | ISO endorsement HO 04 93 or an insurer's own version |
| Payment schedule | A set percentage of the replacement cost based on age and material, less the deductible | An insurer's own endorsement, with the table printed in the form or on the declarations |
The base ISO form pays replacement cost on a building insured to at least 80% of replacement cost, but it pays only actual cash value until the work is complete, and the holdback is released if you tell the insurer within 180 days that you intend to repair. See recoverable depreciation: getting the rest of your claim and replacement cost vs actual cash value: why it matters. The endorsements turn that temporary holdback into a permanent reduction for roofs.
How the ACV roof endorsement works
ISO's version, HO 04 93 ("Actual Cash Value Loss Settlement, Windstorm or Hail Losses to Roof Surfacing"), changes the loss settlement condition so that roof surfacing damaged by windstorm or hail is paid at actual cash value, "but not more than the amount required to repair or replace" (edition 10 00). Everything else about the building stays at replacement cost. Fire, falling trees and other causes of roof damage are outside it. ISO has revised the form since, and trade press notes that editions dated 05 11, 04 16 and 03 22 differ in wording, so read the edition printed on your policy.
Three features cause most of the grief:
- No table. The ISO form does not say how depreciation is calculated. The adjuster or the insurer's estimating software decides, using the roof's age, material and condition. That judgment is where claims fight happens. Ask for the depreciation worksheet. The NAIC's model claims regulation lets an insured request claim-file worksheets detailing the depreciation on residential fire and extended-coverage losses, and your state may have its own rule.
- "Roof surfacing" can be narrow or wide. It clearly includes shingles. Whether it reaches underlayment, flashing, vents or decking depends on the insurer's wording.
- It stays attached. The endorsement does not drop off when you replace the roof. Rough Notes, an insurance trade magazine, points out that it has to be removed to get replacement cost back on a new roof (Rough Notes, Jan. 30, 2026).
The Iowa Insurance Division's consumer page says many policies now carry a roof endorsement that can replace replacement cost with actual cash value and can set a specific depreciation amount based on roof age and material (Iowa Insurance Division, July 2024).
How a payment schedule works
A schedule removes the argument over depreciation by fixing the percentage in advance. Kin, for example, publishes its roof surface payment schedule: for wind and hail damage to the roof surface, payouts follow a reduction of up to 75% for shingles at 19 years (4% per year), up to 60% for tile at 30 years (2% per year) and up to 30% for metal at 30 years (1% per year). Kin's example is a 12-year-old shingle roof that would cost $15,000 to replace: the schedule cuts it by 48%, or $7,200, leaving a potential payout of $7,800 (Kin). Kin says the schedule applies only to wind and hail, covers underlayment, vents, drip edges and skylights as well as the surface, and leaves the rest of the home at replacement cost.
Other insurers use different tables. The same Rough Notes article describes one carrier whose grid runs from age zero to "30 or more" across asphalt, metal, slate, tile and wood, and another that lists the roof year and percentage on the declarations page and applies it to the whole repair cost, including labor, overhead and profit, and taxes. In that form, a licensed contractor's full replacement of the roof resets the year. Not every form works that way, and some rely on a recorded roof year even if it is wrong. Percentages can start lower than people expect: the article cites a six-year-old asphalt roof that might pay only 82%.
A comparison (hypothetical)
Say a 12-year-old asphalt shingle roof costs $20,000 to replace after a hailstorm and your wind/hail deductible is $4,000. The depreciation rate and the schedule percentage below are invented for the arithmetic.
| Policy terms | Calculation | Insurer pays | You pay on the roof |
|---|---|---|---|
| Replacement cost | $20,000 less $4,000 | $16,000 | $4,000 |
| ACV roof endorsement, 50% depreciation | $10,000 less $4,000 | $6,000 | $14,000 |
| Payment schedule, 55% at age 12 | $11,000 less $4,000 | $7,000 | $13,000 |
A schedule can come out better or worse than ACV for the same roof, depending on its table. On a well-kept roof, the adjuster's depreciation might be lower than the schedule's. On a worn one, it might be higher. The thing to compare is the actual table or depreciation method, not the label. Run your own numbers in the roof claim payout estimator or the depreciation calculator: actual cash value vs replacement cost.
Why insurers use them and why you might accept one
Wind and hail is the most frequent homeowners claim, and on a hail claim the roof is usually the biggest line. The Insurance Information Institute, using ISO data for 2019 through 2023, puts wind and hail at 2.80 claims per 100 insured house-years with an average payment of $14,747 (III). An older roof is more likely to leak and costs the insurer the same to replace as a new one, so many insurers either price the risk through the endorsement or decline to renew. The Texas Department of Insurance tells owners that some companies switch to actual cash value as a roof ages, and that a roof in poor condition may not be covered at all (TDI).
For a homeowner, a lower premium and a continued policy can be a fair trade, especially where the alternative is a nonrenewal (roof age limits: when insurers won't cover an old roof). The trade needs money set aside. The check will be smaller than the roof bill by the amount of depreciation, so the gap has to come from savings. A mortgage no longer forces you to buy the better version. Since March 18, 2026, Fannie Mae and Freddie Mac have not required roofs to be insured at replacement cost, although the rest of the home must carry replacement cost (Fannie Mae Selling Guide B7-3-02). A particular lender may still ask for more.
What to do now
- Find the endorsement. Search your declarations page and endorsement list for "roof," "roof surfacing," "actual cash value," "payment schedule" or a form number like HO 04 93. Insurers can add these at renewal, and TDI notes the company should tell you when it changes your coverage.
- Get the table. Ask your agent for the percentage by age and material, the date your roof age is taken from and whether the percentage applies before or after the deductible.
- Check the roof year. If the declarations show the wrong year, fix it in writing, since some schedules lock in the year on file.
- Price the gap. Subtract the scheduled or depreciated payment from the replacement cost of your roof, then add the wind/hail deductible (wind and hail deductibles explained). That is your out-of-pocket exposure.
- Weigh replacing the roof. A new roof usually carries a smaller reduction. Ask in advance whether the endorsement can be removed and replacement cost restored after a replacement, and what proof the insurer wants: the contract, permit and final invoice.
- Compare quotes on roof terms. A cheaper premium that comes with an ACV roof is not the same product as a replacement cost policy.
Florida adds a different roof term. Under Fla. Stat. 627.701(10) an insurer may attach a separate roof deductible of up to the lesser of 2% of Coverage A or 50% of the roof's replacement cost, with a premium credit and an opt-out, and it does not apply to hurricane roof losses (Florida). It is a deductible, not a schedule.
Key takeaways
- An ACV roof endorsement pays replacement cost minus depreciation for wind and hail roof damage; a payment schedule pays a set percentage by roof age and material. Neither returns the difference later.
- Schedules are insurer-specific. Compare the actual table, not the name, and ask how roof age is set and whether replacing the roof resets it.
- Both endorsements usually come with a premium credit. Take one only with savings set aside for the gap.
- The endorsement can stay on your policy after you replace the roof unless you ask to have it removed.
- Mortgage rules now allow ACV roof coverage, but your lender may still require more.