Roof Depreciation Calculator
Last reviewed How we calculate
When an insurer pays out on a damaged roof, it may pay the full cost of a new roof or only the depreciated value of the old one, often called actual cash value. This estimates that depreciated value from the roof’s age, its expected lifespan and the cost of replacing it.
Depreciated roof value for an insurance claim
The depreciated value of a roof for an insurance claim, from its age, lifespan and replacement cost.
This calculator needs JavaScript to work. The measurements below are the ones you would need to do the sum by hand.
Depreciated value Replacement cost less depreciation, often called actual cash value.
- Depreciation
- Depreciation amount
- Expected life left
The roof has reached its expected lifespan, so depreciation is at the maximum on this method.
Straight-line depreciation is the simplest method and a common starting point, but insurers use their own schedules, and some policies pay the full replacement cost instead. Your policy wording and your adjuster decide the figure; this helps you understand the one you are given.
How the calculation works
Straight-line depreciation assumes a roof loses the same share of its value each year. The share lost is the age over the expected lifespan, capped where a policy caps it. Take that share of the replacement cost off, and what is left is the depreciated value.
A worked example
A roof that would cost 15,000 to replace, 12 years into an expected 25-year life, has depreciated by 48 per cent. That is 7,200 of depreciation, leaving a depreciated value of 7,800, with about 13 years of expected life left.
How insurers actually do it
Straight-line is the simplest method and a common starting point, but it is not the only one. Insurers use their own depreciation schedules, some treat different parts of the job differently, and many policies pay the full replacement cost, sometimes holding back the depreciation until the work is done. Your policy wording and your adjuster decide the figure. Use this to understand the number you are given and to ask sensible questions about it.
Frequently asked questions
What is the difference between replacement cost and actual cash value?
Replacement cost is what a new roof would cost today. Actual cash value is that cost less depreciation for the age of the old roof, which is what this calculator estimates.
Will my insurer use this figure?
Not necessarily. Insurers use their own depreciation schedules, and many policies pay replacement cost instead. Use the result to understand the figure your adjuster gives you.
Does a newer roof get a better payout?
On a depreciation basis, yes: the younger the roof relative to its expected life, the smaller the deduction.