What Every Homeowner Should Know Before Filing a Property Damage Claim
If you’ve ever experienced water damage, fire, or another type of property loss, you know how quickly things can feel overwhelming. One of the most confusing parts of the recovery process is understanding what your insurance policy actually covers—and how much you’ll receive to repair the damage.
Terms like ACV, RCV, and maximum benefit coverage can seem vague or technical, but they have a big impact on how your restoration claim plays out. In this post, we’ll break down the differences in simple terms, explain how each affects your payout, and share tips to help you make more informed decisions before and after a disaster.
Why This Matters
Let’s say a pipe bursts and floods your kitchen. You call a plumber, then a restoration company. You file a claim, expecting the damage to be covered. But your insurer only offers to pay a portion of the repair cost.
Why? It often comes down to the type of coverage you have.
That’s why understanding the basics of ACV, RCV, and maximum benefit policies can save you time, money, and stress—especially when you’re trying to put your home back together.
1. What Is ACV (Actual Cash Value)?
Actual Cash Value means your insurance provider will pay the depreciated value of the damaged property or materials.
In simple terms:
You’ll be reimbursed for what your home items or building materials are worth today, not what it costs to replace them new.
Example:
If your 10-year-old wood floor is damaged, and it would cost $5,000 to replace it today—but its depreciated value is $2,000—you’ll receive $2,000, minus your deductible.
Pros:
- Typically comes with lower monthly premiums
- Provides some reimbursement for losses
Cons:
- May not provide enough to fully repair or replace damaged property
- Homeowners must pay the difference out-of-pocket to restore to pre-loss condition
2. What Is RCV (Replacement Cost Value)?
Replacement Cost Value coverage pays for the full cost to replace damaged materials with new ones of like kind and quality—without deducting for depreciation.
In simple terms:
You get reimbursed for what it actually costs to rebuild or repair, not what the old materials were worth at the time of loss.
Example:
If that same wood floor would cost $5,000 to replace, your insurance would cover the full $5,000, minus your deductible—even if the floor was 10 years old.
Pros:
- More complete financial protection
- Ensures you can fully restore your home to its original condition
Cons:
- Usually comes with higher monthly premiums
- May still require you to pay out-of-pocket first, then submit receipts for reimbursement
Important Note:
Some RCV policies pay ACV first, and release the remainder after repairs are completed and documentation is submitted. This is why working with a restoration company experienced in insurance coordination is key.
3. What Is “Maximum Benefit” Coverage?
Some policies—particularly those sold as budget or “basic” options—have a maximum benefit cap. This means the insurer sets a fixed dollar limit on what they will pay for any claim, regardless of the actual repair cost.
In simple terms:
Once your claim hits the cap, you’re responsible for any remaining cost.
Example:
If your policy has a $10,000 limit on water damage coverage, and the total cost to restore your home is $18,000, your insurance only pays $10,000—you must cover the remaining $8,000 yourself.
Pros:
- Often very affordable monthly premiums
Cons:
- May fall far short in a major loss
- Often misunderstood by homeowners until after a claim is filed
Why Restoration Companies Need to Know What You’re Covered For
As a homeowner, knowing your insurance type helps you ask the right questions and plan for your financial responsibility during the restoration process.
At Standard Restoration, we work with homeowners and insurance companies every day. We review your policy, document the damage, and communicate directly with adjusters to make sure nothing is overlooked.
Here’s how we help:
- Photo documentation and moisture readings for your claim
- Detailed scope of work based on your policy type
- Help filing supplements if unexpected damage is uncovered
- Guidance on when and how insurance releases payment (especially for RCV)
Tips for Homeowners Before Disaster Strikes
- Review your policy today. If you’re unsure whether you have ACV or RCV, call your agent and ask.
- Ask about maximum limits for water, mold, and other specific damages.
- Document your home and valuables with photos and receipts—it helps prove replacement value later.
- Choose a restoration company experienced in insurance coordination—not all contractors know how to navigate claim processes.
The More You Know, the Better You Can Recover
Understanding your insurance coverage isn’t just paperwork—it directly impacts how much help you’ll receive after a disaster.
If your home has experienced damage, Standard Restoration is here to guide you through every step. We work quickly, communicate clearly, and help you get the most out of your insurance coverage—whether it’s ACV, RCV, or capped benefits.
Need Help Navigating Your Claim?
Contact Standard Restoration today for a free inspection and professional guidance on your property damage and insurance claim. We’ll help you understand what your policy covers—and make sure the restoration work meets your home’s full needs.
