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So, your insurance carrier withheld part of your payment and told you it was “recoverable depreciation.” Now what?
If you’re covered under a Replacement Cost Value (RCV) policy, you have a right to claim that withheld amount. But here’s the catch—it’s not automatic, and the process can be tedious, frustrating, and paperwork-heavy.
The following blog aims to educate and empower the insured claimant to claim recoverable depreciation without missing deadlines, stalling the payout, or doing the carrier’s job for them.
How Is Recoverable Depreciation Calculated?
At a basic level, here’s how your claim is broken down:
Let’s say you had a roof worth $30,000 before a storm. After accounting for wear and age, the insurer decides it’s now worth $20,000 at the time of loss. That’s your ACV payment.
The remaining $10,000? That’s the recoverable depreciation.
To receive it, you need to show that the roof has been repaired or replaced and submit all necessary documentation.
The Role of Inflation
A quick but important side note: Inflation can affect the actual RCV. Some policies include provisions like law and ordinance coverage or increased RCV endorsements allowing for inflationary increases, but not all do. Additional endorsements may be required for this type of coverage, so it’s essential to review your policy language.
If prices for labor and materials have increased since your policy was written, the real cost to repair your property could be higher than your carrier’s estimate.
A qualified public adjuster (like us) can help evaluate whether your current policy reflects today’s pricing or if the carrier’s estimate is stuck in last year’s market conditions. We often conduct our own pricing analysis and provide updated scopes of work to reflect accurate, real-time market costs.
When Do You Actually Get Paid?
Insurance companies usually issue payments in two phases:
Initial Payment
You receive the ACV upfront after your claim is approved.
Supplemental Payments
Sometimes, additional damages or overlooked line items surface during the repair process. You or your contractor can submit a supplemental claim to account for those differences.
Final Payment
Once repairs are completed and documented, the recoverable depreciation may be released. Keep in mind, time limits may apply.
Some policies allow up to 180 days to file for recoverable depreciation, but others may have different guidelines to follow. It’s important to check your policy for exact deadlines!
How to Claim Recoverable Depreciation
Ready to get your full payout? Follow these steps:
- Complete the Repairs
Work with a licensed contractor and keep everything documented. Some insurance carriers require you to notify them or get approval before starting repairs. Review your policy or consult a professional to confirm any pre-approval requirements. - Organize Documentation
Save every invoice, receipt, and before/after photo. You’ll need to prove the repairs were done and paid for. - Submit to the Carrier
Send all documentation to your claims adjuster. Some carriers have online portals; others require mail or email submissions. Don’t assume they’ll follow up—you need to be proactive. - Follow Up
Check in regularly. Some carriers delay depreciation payments unnecessarily, hoping you’ll give up. - Bring in Professionals
If the carrier pushes back, underpays, or ignores your request, a public adjuster or legal expert can step in to escalate the issue.
Don’t Leave Money on the Table
Thousands of policyholders never claim their recoverable depreciation, simply because they didn’t know they had to.
If you’ve completed repairs and haven’t received your full payout, or if you’re unsure what you’re entitled to, we’re here to help.
Submit your policy for a free review today!
Need a refresher on what recoverable depreciation actually is?
Read our blog: Recoverable Depreciation: What It Is and Why It Matters
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