How an insurance claim settlement is calculated
Property insurance payments follow a fairly standard structure, even though every policy is different. This insurance claim settlement calculator walks through that structure so Corpus Christi and Coastal Bend property owners can see why the first check is often smaller than the repair estimate, and how much more may be available later. Here are the key terms.
Replacement cost value (RCV)
RCV is what it would cost today to repair or replace the damaged property with materials of like kind and quality. On a roof claim that includes tear-off, new shingles or metal panels, underlayment, flashing, labor, and related items. Both the insurer's estimate and your contractor's estimate should show an RCV total.
Depreciation
Depreciation is a reduction in value for age, wear, and condition. Insurers often apply it line by line. Two kinds matter:
- Recoverable depreciation – under a replacement cost policy, the withheld amount can typically be recovered after repairs are completed, within a deadline in the policy.
- Non-recoverable depreciation – on an actual cash value policy, or on coverage settled at ACV (some policies settle roofs this way), depreciation is not paid back.
Actual cash value (ACV)
ACV is RCV minus depreciation. Under a typical replacement cost policy, the insurer pays ACV first, minus your deductible, then releases recoverable depreciation once repairs are done.
Deductibles
Your deductible is the portion of a covered loss you pay. On the Texas coast, many homeowners and TWIA policies use a wind/hail or named-storm deductible calculated as a percentage of the dwelling (Coverage A) limit. A 2% deductible on a $250,000 dwelling limit is $5,000. Check your declarations page, and use the hurricane deductible calculator to convert a percentage into dollars.
Policy limits and prior payments
The insurer will not pay more than the applicable limit, such as Coverage A or a sublimit for a specific kind of damage. If you have already received checks on the claim, they are subtracted to show what may still be owed.
Where to find your numbers
The insurer's estimate usually lists RCV, depreciation, ACV, deductible, and net claim amount on its summary page. Your declarations page shows limits and deductibles. If you have a contractor's estimate, enter its total as the RCV to compare. After a hurricane, run wind damage (homeowners or TWIA) and flood damage (NFIP or private flood) separately, since each policy has its own deductible and limits.
Worked example
Click Load example in the calculator to see these numbers. The example assumes a replacement cost policy, an RCV of $24,000, depreciation of $7,200, a $5,000 deductible, no prior payments, no non-covered costs, and no policy limit entered.
| Step | Calculation | Amount |
|---|---|---|
| Covered RCV | $24,000 RCV − $0 non-covered | $24,000 |
| Actual cash value (ACV) | $24,000 − $7,200 depreciation | $16,800 |
| Initial (ACV) payment | $16,800 − $5,000 deductible − $0 prior payments | $11,800 |
| Recoverable depreciation | ($24,000 − $5,000) − $11,800 | $7,200 |
| Total estimated proceeds | $11,800 + $7,200 | $19,000 |
| Out-of-pocket cost | $24,000 − $19,000 (the deductible) | $5,000 |
If you uncheck the replacement cost box to model an ACV policy, recoverable depreciation drops to $0, total proceeds fall to $11,800, and the $7,200 of depreciation becomes part of your out-of-pocket cost.
Common reasons the numbers do not match your repair cost
- Missing line items. Estimates sometimes leave out drip edge, starter strip, ridge vents, gutters, or interior damage from wind-driven rain.
- Code and windstorm requirements. Work required by current codes may be covered only under ordinance or law coverage, up to its limit. Re-roofing in Corpus Christi needs a city permit and TDI windstorm compliance; see local building codes.
- Depreciation choices. The age and condition assigned to materials, including salt-air wear on metal, can change ACV significantly.
- Pricing. Unit prices may not reflect local labor and material costs after a major storm.
If the insurer's estimate looks low, read how to review an underpaid roof insurance estimate or ask about our insurance estimate review. Coverage and payment always depend on your policy and the facts of your claim.
Frequently Asked Questions
Is this insurance claim settlement calculator accurate?
It applies standard math for replacement cost and actual cash value settlements, so it is useful for seeing how the numbers fit together. It is an educational estimate only. Your actual payment depends on your policy language, endorsements, sublimits, depreciation methods, and the facts of the claim.
What is the difference between RCV and ACV?
Replacement cost value (RCV) is the cost to repair or replace damaged property with materials of like kind and quality at current prices. Actual cash value (ACV) is RCV minus depreciation. Read more in replacement cost vs. actual cash value in Texas.
How do I get my recoverable depreciation?
Under many replacement cost policies, the insurer pays ACV first and releases recoverable depreciation after repairs are completed and documented, within a deadline stated in the policy. Check the time limit and ask your insurer what proof it needs, such as a final invoice.
Can I use this for a TWIA claim?
Yes, as a rough guide. Enter the wind or hail portion of the damage and your TWIA deductible. Keep in mind that TWIA covers wind and hail only, so flood or surge damage belongs on a separate flood claim. To see what a percentage deductible means in dollars, try the hurricane deductible calculator.
Why is my wind/hail deductible so high?
Many Texas policies carry a separate wind/hail or named-storm deductible calculated as a percentage of the dwelling (Coverage A) limit rather than a flat amount. A 2% deductible on a $250,000 dwelling limit is $5,000. Check your declarations page for the exact figure.
What if the insurer's estimate seems too low?
Compare the estimate line by line with what the repairs require, including code-required items and permits, and ask the insurer to explain differences. A public adjuster can review it with you; see insurance estimate review. No one can promise a different result, but a careful review can find missing items.