ACV, RCV, Depreciation, and Supplements: An Illinois Storm-Claim Guide

By Supreme Building Group | September 22, 2026 | Illinois homeowner guidance

Storm-claim estimates often place four unfamiliar terms on the same page: actual cash value, replacement cost value, depreciation, and supplement. They are related, but they do not mean the same thing—and none of them, by itself, tells you whether a particular item is covered.

This guide explains the terms in plain English, shows how a common payment sequence works, and identifies the records that help when the construction scope changes. Your policy and the insurer’s written decision control coverage. A contractor can document building conditions and repair work, but cannot interpret the policy, adjust the claim, or promise a payment.

ACV: the value after depreciation

The Illinois Department of Insurance homeowner definitions describe actual cash value, or ACV, as replacement cost less depreciation, considering the age and condition of the property. IDOI defines depreciation as the decrease in value due to age or wear and tear.

For residential fire and extended-coverage claims to which it applies, 50 Illinois Administrative Code 919.80(d)(8) also describes ACV as replacement cost at the time of loss less depreciation, if any. The rule says that, upon the insured’s request, the company must provide claim-file worksheets detailing depreciation deductions, including information such as the property’s age, condition, and expected life.

ACV is therefore not simply the price of the material when it was first installed. It is a valuation calculated at the time of loss under the policy and applicable rules.

RCV: the cost before subtracting depreciation

IDOI defines replacement cost as the cost to replace contents, rebuild the home, or repair damage with materials of like kind and quality without subtracting depreciation. Replacement cost value is commonly shortened to RCV on an estimate.

An RCV number is not automatically the amount of the first check. IDOI’s disaster claim guidance explains that, under many replacement-cost policies, the company first pays an ACV amount. After the homeowner actually completes eligible repair or replacement work and submits the required documentation, the company may pay the difference between ACV and replacement cost, subject to the policy’s terms, limits, deadlines, and other conditions.

Some policies may value the dwelling one way and certain surfaces, roofs, or personal property another way. Check the declarations, endorsements, and claim letter, then ask the insurer or agent to identify the exact provision that applies.

Depreciation: recoverable is not the same as guaranteed

On an estimate, depreciation is the reduction from replacement cost based on factors such as age, condition, and expected useful life. The estimate may label some depreciation “recoverable” and some “nonrecoverable.” Those labels matter.

Recoverable depreciation generally refers to an amount the policy may release after covered repair or replacement work is completed and properly documented. It is not an automatic bonus. The homeowner may need to meet policy deadlines, show invoices or receipts, provide proof of completion, and comply with other conditions. Nonrecoverable depreciation is not scheduled for later payment under the estimate as written.

If the calculation is unclear, ask the insurer in writing for:

• The replacement-cost amount for each affected component.

• The depreciation deducted from each line item.

• The age, condition, and expected-life assumptions used.

• Which depreciation is identified as recoverable or nonrecoverable.

• The documents, repair milestones, and deadlines required to request any additional payment.

Do not assume another homeowner’s payment sequence applies to your policy. Roof-surface endorsements, settlement options, deductibles, policy limits, prior conditions, and replacement deadlines can change the result.

A simple way to read the estimate

A common estimate starts with the current repair or replacement cost. It then subtracts depreciation to show an ACV figure. The insurer may also apply the policy deductible and other adjustments when calculating a net payment. If the policy provides replacement-cost settlement and its conditions are met, eligible recoverable depreciation may be considered after completed work is documented.

Read the estimate in this order:

1. Scope: What work, quantities, materials, and operations are included?

2. RCV: What current repair or replacement cost is assigned?

3. Depreciation: What was deducted, and why?

4. ACV: What value remains after depreciation?

5. Deductible and adjustments: What other amounts affect the net payment?

6. Replacement-cost conditions: What must be completed and submitted, and by when?

Our insurer-estimate versus contractor-scope checklist provides a separate line-by-line review for quantities, access, materials, detach-and-reset work, code-related items, and documented hidden conditions.

What a supplement is—and what it is not

“Supplement” is a common construction and claim-handling term for a request that the insurer review additional documented scope, quantities, materials, costs, or conditions that were not fully addressed in an earlier estimate. It is not a separate guarantee of coverage, a way to erase a deductible, or permission to inflate a price.

A supplement may become relevant when:

• Measurements or quantities differ after field verification.

• A necessary construction operation was omitted from the original scope.

• Actual like-kind-and-quality materials or local labor costs differ from an estimate assumption.

• Building-code requirements apply and the policy’s ordinance-or-law terms must be reviewed.

• A concealed condition is discovered only after authorized work begins.

• Temporary protection, access, or detach-and-reset work is documented and relevant to the repair.

IDOI advises homeowners to contact the insurer when there is a repair-cost discrepancy or a contractor discovers hidden damage. The contractor can prepare photographs, measurements, invoices, product information, and a construction explanation. The insurer decides whether the policy covers the item and what it will pay. A homeowner or properly authorized licensed representative should handle claim communications within the scope of their role.

Documentation that makes a supplement reviewable

A clear packet is more useful than a larger packet. Include only records that explain the construction difference:

• A marked estimate showing the exact disputed or missing line items.

• Wide and close photographs tied to a specific roof slope, elevation, room, or component.

• Measurements, material identification, manufacturer instructions, and availability information.

• Permit or code citations when code-related work is asserted.

• Invoices, receipts, signed change orders, and proof of completed work when required.

• A short timeline identifying when the new condition was discovered and when the insurer was notified.

For concealed conditions, use our hidden-damage documentation checklist. Do not remove or discard relevant materials before the insurer has a reasonable opportunity to review them unless immediate safety or mitigation requires action; document urgent work before, during, and after.

Keep the professional roles separate

The insurer and its adjuster handle the insurer’s investigation, coverage decision, estimate, and payment. A licensed public adjuster may represent a policyholder in adjusting and negotiating a claim within the scope of that Illinois license. An attorney can interpret policy language, advise on legal rights and deadlines, and handle a legal dispute.

A contractor evaluates construction conditions, proposes repair methods, calculates quantities, and documents work. That role does not include deciding coverage or negotiating a claim unless the person separately holds the required license. Review our contractor, insurer adjuster, public adjuster, and attorney guide before deciding who should answer a question.

Five questions to send the insurer in writing

1. Does the relevant part of my policy settle this item at ACV or replacement cost?

2. Which depreciation is recoverable, and what must I submit to request it?

3. What deadline applies to completing work or presenting replacement-cost documentation?

4. How were the age, condition, expected life, quantities, and material assumptions determined?

5. What process should I use to submit newly documented construction scope or cost information?

If you need help interpreting the answer, contact the insurer or agent first, then a licensed public adjuster or qualified Illinois attorney for work within their respective roles.

Need a documented construction scope?

Supreme Building Group can document accessible roof, siding, gutter, and exterior conditions and prepare a construction repair scope. We do not determine policy coverage or promise that depreciation or a supplement will be paid. To request an exterior inspection in Chicagoland, visit our storm-damage service page or call (224) 735-4245.

Official Illinois sources

This article was reviewed September 22, 2026. Sources: Illinois Department of Insurance homeowner definitions, IDOI disaster and claim guidance, 50 Ill. Adm. Code 919.80, and the IDOI consumer complaint guide.