Actual Cash Value, Replacement Cost, and Depreciation in Florida Property Claims

This article covers how first-party residential property claims are valued in Florida: the statutory mechanism for paying actual cash value (ACV) first and releasing recoverable depreciation as repairs are made, what may be depreciated (including the contested labor question), how overhead and profit fit in, and the live district split over recovering replacement cost value (RCV) on unrepaired property. The governing statute is section 627.7011, Florida Statutes, and the controlling valuation case is Trinidad v. Florida Peninsula Insurance Co., 121 So. 3d 433 (Fla. 2013). Scope: Florida law, personal-lines homeowners coverage written on a replacement-cost basis, as of June 14, 2026, reflecting the 2021 through 2023 reform cycle (SB 76, SB 2-D, SB 2-A, and HB 837). It does not cover flood (NFIP), commercial property valuation in depth, or bad-faith procedure beyond what bears on valuation timing.

How Florida pays ACV and RCV

On a replacement-cost dwelling policy, the insurer does not write one check for the full repair cost up front. Section 627.7011(3)(a) requires the carrier to "initially pay at least the actual cash value of the insured loss, less any applicable deductible," and then to "pay any remaining amounts necessary to perform such repairs as work is performed and expenses are incurred." That withheld remainder is the recoverable depreciation. It is the spread between RCV and ACV, released once the insured repairs or replaces and documents the cost.

The valuation formula itself comes from Trinidad: ACV is replacement cost minus depreciation. That sounds clean until you ask what "depreciation" is allowed to capture, because the statute does not define it and the policy form usually does not either. Every undervaluation fight, the low ACV check, the aggressive depreciation schedule, the disputed repair estimate, lives in that gap.

What can be depreciated, including labor

Depreciation plainly reaches materials. A fifteen-year-old shingle on a twenty-five-year roof is worth less than a new one, and nobody seriously argues otherwise. The recurring fight is labor. Roughly half a roof replacement is labor, so depreciating it materially lowers the ACV check.

Florida sits on the permissive side of a national split, and that surprises some claimants. The leading state authority is Goff v. State Farm Florida Insurance Co., 999 So. 2d 684 (Fla. 2d DCA 2008), available here. On cross-motions for summary judgment, the Second District endorsed the replacement-cost-less-depreciation method and, quoting Branch v. Farmers Insurance Co., 55 P.3d 1023 (Okla. 2002), reasoned that because labor is a cost the insured is reasonably likely to incur in replacing a roof, it falls within "replacement cost" and may be depreciated along with materials. The court affirmed summary judgment for the insurer on the depreciation count (Goff, 999 So. 2d at 690), holding the carrier could depreciate a portion of the disputed costs rather than pay them whole. The Florida Supreme Court favorably cited Goff in Trinidad, 121 So. 3d at 443, though that reference was dicta and the Court has never squarely decided labor depreciation.

Two honest caveats belong with that rule. First, Goff's labor discussion is best read as persuasive reasoning attached to an overhead-and-profit holding, not a stand-alone labor ruling, which is why careful counsel call the labor point unsettled at the Supreme Court level even while treating Goff as the operative appellate answer. Second, the result is policy-language driven. Where a form defines ACV or "depreciation" narrowly, or leaves the term ambiguous, the analysis can flip, and the out-of-state cases policyholder counsel consider better reasoned run hard against depreciating labor: the Arkansas Supreme Court in Adams v. Cameron Mutual Insurance Co., 430 S.W.3d 675 (Ark. 2013), the Tennessee Supreme Court on a certified question in Lammert v. Auto-Owners (Mutual) Insurance Co., 572 S.W.3d 170 (Tenn. 2019), and the Illinois Supreme Court in Sproull v. State Farm Fire & Casualty Co., 184 N.E.3d 203 (Ill. 2021), all held labor non-depreciable where the ACV terms were undefined or ambiguous: undefined in Adams and Sproull, and defined but ambiguous as to labor in Lammert. A Florida adjuster who treats labor depreciation as bulletproof under any wording is overreading Goff.

The most recent Florida appellate word sharpens the practical point without disturbing Goff. In Greenaker v. Universal Property & Casualty Insurance Co., No. 2D2024-1964 (Fla. 2d DCA May 8, 2026), available here, the Second District held that labor and other nonmaterial costs, including overhead and profit, are components of ACV rather than replacement-cost-only items, and that the line between ACV and RCV turns on depreciation, not on the type of cost. Tellingly, both the insureds' estimate and the carrier's own expert estimate there computed ACV by depreciating materials but not labor, and that treatment went unchallenged, a reminder that Florida's permissive rule allows labor depreciation but does not compel it, and that many estimates in the market do not apply it.

Overhead and profit

Trinidad is the controlling word on contractor overhead and profit (O&P). Construing the 2008 version of section 627.7011, the Florida Supreme Court held that O&P is part of replacement cost, and of ACV, when the insured is reasonably likely to need a general contractor, and that the insurer may not withhold those amounts until the insured actually incurs them. The procedural posture matters: this was the Court answering a question of statutory construction on review of a Third District decision, so it is binding statewide, not a fact-bound jury affirmance. The narrower point that survives from Goff is that a proportional share of O&P, like other repair costs, is itself depreciable when calculating ACV; the carrier just cannot zero it out.

The recoverable-depreciation timeline

Recoverable depreciation has no standalone statutory clock. It rides on the claim-handling and limitations deadlines, and missing those is how a recoverable balance quietly becomes unrecoverable. The sequence below is for a non-hurricane residential RCV claim. Hurricane claims carry their own inspection and tolling wrinkles.

The 60-day pay-or-deny window (reduced from 90 by SB 2-A, effective March 1, 2023) is the deadline that controls when the ACV check is owed. The presuit notice under section 627.70152 cannot go out until the carrier has made its coverage determination under section 627.70131, so the two statutes interlock. SB 2-A also stripped the one-way attorney-fee provisions from section 627.70152, and HB 837 (2023) eliminated one-way fees under section 627.428 for most property suits, which is the single biggest reason the litigation economics of small underpayment disputes have changed.

The measure-of-damages split: Tio versus Qureshi

The sharpest open question is not how to depreciate but what an insured can recover when the carrier wrongfully denies or underpays and the property is never repaired. The districts are split, and venue decides the answer.

Tio affirmed a final judgment for the insured after trial, holding the statute dictates how covered claims get paid but does not cap damages when coverage is wrongfully denied. Qureshi reversed a jury verdict and remanded for a new trial on damages, reasoning that replacement-cost liability does not arise until repairs are done, with the wrinkle that the insureds had sold the property before trial. The dissent would have applied Tio. The Fourth District certified conflict, so this is headed for the Florida Supreme Court, but as of June 14, 2026 the Court has not resolved it, and the Second and Sixth Districts have since lined up behind Tio, leaving the Fourth as the outlier. The carriers' strongest contrary hook is Citizens Property Insurance Corp. v. Manor House, LLC, 313 So. 3d 579 (Fla. 2021), available here, where the Florida Supreme Court held that the amount owed is fixed by the policy's express terms and barred extra-contractual consequential damages in a first-party action not brought under section 624.155; the Tio line distinguishes Manor House as addressing consequential damages rather than the contractual measure of a covered loss, and Rodriguez rejected the argument on that basis. Watch the procedural posture before relying on any of these as settled coverage law. Tio and Brito are both denial fact patterns, coverage was refused outright, which is precisely why the payment-splitting provision did not cap damages; Qureshi turned partly on a sold property. None is a 12(b)(6) ruling, but the breach predicate is doing real work in each.

The split lives entirely on the denial side. Where coverage is admitted and only price or scope is disputed, the payment-splitting provision controls and the measure is ACV: in Vazquez v. Citizens Property Insurance Corp., 304 So. 3d 1280 (Fla. 3d DCA 2020), available here, the Third District, the same court that decided Tio the same day, held that the "insured loss" is the property actually damaged and that matching costs to replace undamaged items are not part of ACV and are owed only as repairs are performed. Tio itself distinguishes Vazquez on exactly this ground. A related evidentiary trap shows up in Citizens Property Insurance Corp. v. Salazar, 388 So. 3d 115 (Fla. 3d DCA 2023): where the only estimate in evidence is an RCV number and the insured offers no way to parse ACV, the jury has nothing legitimate to award, and the verdict gets reversed. Proving entitlement is not the same as proving the correct measure.

The shift to ACV roofs

Florida did not adopt the scheduled-depreciation "roof payment schedule" that circulated in early SB 76 drafts. That concept was dropped before passage. What the Legislature enacted instead is a separate roof deductible under section 627.701(10): capped at the lesser of 2 percent of Coverage A or 50 percent of the cost to replace the roof, applicable only to claims adjusted on a replacement-cost basis, and inapplicable to a total loss under the valued policy law, a hurricane roof loss, a tree-fall puncture, or a loss requiring repair of less than 50 percent of the roof. Paired with it, section 627.7011(3)(a) lets the carrier cap the roof payment at ACV until the insured shows reasonable proof of paying the roof deductible.

The practical move in the market, and this is a practice observation rather than a statutory command, is toward ACV roof loss settlement endorsements on older roofs, approved as policy forms by the Office of Insurance Regulation, which convert the roof from RCV to ACV by age and material. That is the real mechanism behind "more policies going to ACV on roofs," not a depreciation schedule baked into the statute. Underwriting appetite is also shaped by section 627.7011(5), effective July 1, 2022: a carrier cannot refuse to write a roof under 15 years old solely for age, and for a roof 15 years or older must accept an authorized inspection showing five or more years of useful life.

Practical takeaways

For coverage counsel, the labor question is winnable for carriers in Florida on undefined-ACV forms under Goff, but the form language is the whole ballgame, and the out-of-state trend is a live argument on ambiguous wording. On unrepaired-property damages, venue is dispositive right now: the same facts recover RCV in the Second, Third, and Sixth Districts and only ACV in the Fourth.

For underwriting and rate filings, ACV roof endorsements and the separate roof deductible are the levers that actually shift exposure, and both run through OIR form and rate approval. The roof-age inspection rule in section 627.7011(5) constrains nonrenewal-by-age decisions and should be reflected in eligibility rules.

For claim handling and reserving, the 60-day pay-or-deny clock and the interest-from-notice rule make a late or short ACV payment expensive and feed bad-faith exposure even after HB 837. Reserve the recoverable-depreciation holdback as a real future payable, document the depreciation basis in writing under section 627.70131(7)(a) when the payment is below your own estimate, and calendar the insured's 18-month supplemental-claim deadline, because that is the window in which the recoverable balance typically gets claimed.

Settled versus open

Settled: ACV equals replacement cost minus depreciation (Trinidad); O&P is owed in ACV and RCV when a general contractor is reasonably likely and cannot be held back until incurred (Trinidad); the carrier pays ACV first and releases recoverable depreciation as work is performed (s. 627.7011(3)(a)). Open: whether labor is depreciable is answered yes by Goff at the district level but never squarely by the Florida Supreme Court, and the answer can move with policy wording; and the measure of damages for unrepaired property after a breach is genuinely unresolved pending Supreme Court review of the Tio and Qureshi conflict.

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General legal analysis, current to June 14, 2026 — not advice on a specific claim. The recent Florida reforms apply differently by policy issuance and date of loss, so verify the current statute and the cited opinions before relying on them.

Sources

Primary sources (statutes)

• Fla. Stat. s. 627.7011, Homeowners' policies; offer of replacement cost coverage: https://www.flsenate.gov/Laws/Statutes/2024/627.7011
• Fla. Stat. s. 627.701 (roof deductible at subsection (10)): https://www.flsenate.gov/Laws/Statutes/2022/627.701
• Fla. Stat. s. 627.70131, Insurer's duty to acknowledge claims; investigation: https://www.flsenate.gov/Laws/Statutes/2023/627.70131
• Fla. Stat. s. 627.70132, Notice of property insurance claim: https://www.flsenate.gov/laws/statutes/2022/627.70132
• Fla. Stat. s. 627.70152, Suit under property insurance policy; presuit notice: https://www.flsenate.gov/Laws/Statutes/2025/627.70152
• Fla. Stat. s. 95.11 (breach of property insurance contract limitation, subsection (2)(e)): https://www.flsenate.gov/laws/statutes/2023/95.11

Case opinions (Florida Supreme Court)

• Trinidad v. Florida Peninsula Insurance Co., 121 So. 3d 433 (Fla. 2013): https://www.courtlistener.com/opinion/4993973/trinidad-v-florida-peninsula-insurance-co/
• Citizens Property Insurance Corp. v. Manor House, LLC, 313 So. 3d 579 (Fla. 2021), insurer-side authority on the contractual measure of damages: https://www.courtlistener.com/opinion/4849195/citizens-property-insurance-corporation-v-manor-house-llc/

Case opinions (Florida District Courts of Appeal)

• Goff v. State Farm Florida Insurance Co., 999 So. 2d 684 (Fla. 2d DCA 2008): https://www.courtlistener.com/opinion/1105479/goff-v-state-farm-florida-ins-co/
• Citizens Property Insurance Corp. v. Tio, 304 So. 3d 1278 (Fla. 3d DCA 2020): https://law.justia.com/cases/florida/third-district-court-of-appeal/2020/3d18-2440.html
• Vazquez v. Citizens Property Insurance Corp., 304 So. 3d 1280 (Fla. 3d DCA 2020): https://caselaw.findlaw.com/court/fl-district-court-of-appeal/2061288.html
• Citizens Property Insurance Corp. v. Salazar, 388 So. 3d 115 (Fla. 3d DCA 2023): https://www.courtlistener.com/opinion/9430018/citizens-property-insurance-corporation-v-magda-v-salazar/
• Universal Property & Casualty Insurance Co. v. Qureshi, 396 So. 3d 564 (Fla. 4th DCA 2024): https://www.courtlistener.com/opinion/10012920/universal-property-casualty-insurance-corporation-v-irma-qureshi-and/
• Brito v. Citizens Property Insurance Corp., 415 So. 3d 252 (Fla. 2d DCA 2025): https://www.courtlistener.com/opinion/10609736/brito-garcia-v-citizens-property-insurance-corporation/
• Universal Property & Casualty Insurance Co. v. Rodriguez, No. 6D2024-1194, 2026 WL 370220 (Fla. 6th DCA Feb. 6, 2026): https://www.courtlistener.com/opinion/10785217/universal-property-casualty-insurance-company-v-nelson-rodriguez-and/
• Greenaker v. Universal Property & Casualty Insurance Co., No. 2D2024-1964 (Fla. 2d DCA May 8, 2026): https://www.courtlistener.com/opinion/10856215/greenaker-greenaker-v-universal-property-casualty-insurance-company/

Case opinions (out-of-state, persuasive)

• Branch v. Farmers Insurance Co., 55 P.3d 1023 (Okla. 2002), source of the labor-depreciation reasoning adopted in Goff: https://www.courtlistener.com/opinion/2598725/branch-v-farmers-ins-co-inc/
• Lammert v. Auto-Owners (Mutual) Insurance Co., 572 S.W.3d 170 (Tenn. 2019), persuasive, contrary on labor depreciation: https://www.courtlistener.com/opinion/4610135/gregory-j-lammert-v-auto-owners-mutual-insurance-company/
• Sproull v. State Farm Fire & Casualty Co., 184 N.E.3d 203 (Ill. 2021), persuasive, contrary on labor depreciation: https://www.courtlistener.com/opinion/5299384/sproull-v-state-farm-fire-and-casualty-co/
• Adams v. Cameron Mutual Insurance Co., 430 S.W.3d 675 (Ark. 2013), persuasive, contrary on labor depreciation: https://www.courtlistener.com/opinion/2643412/adams-v-cameron-mutual-insurance-co/