You've experienced a loss at your property. Your insurance company sends you their estimate of the damage, but it has two different amounts – one significantly less than the other. When this happens, it's likely that your insurance company held back “depreciation” funds. Why? In this article, I'll explain what recoverable depreciation is and how to recover it after a property damage loss.

Recoverable depreciation is a term used in insurance claims that refers to the difference between the actual cash value (ACV) of the damaged property and its replacement cost value (RCV). ACV is the value of the property at the time it was damaged, taking into account depreciation and wear and tear. RCV is the cost of repairing or replacing the damaged property with new items of similar quality and type.

For example, suppose your roof is damaged in a storm. The ACV of the roof is $10,000, and the RCV is $15,000. Your insurance policy may cover the RCV of the roof, but they will deduct the ACV from the RCV to calculate the depreciation. You'll only receive the ACV amount upfront. The remaining $5,000 is the recoverable depreciation.

To recover the depreciation ($5,000 in this example), you will need to complete the repairs or replacement of the damaged property and submit proof of the expenses to your insurance company. The insurance company will review the expenses and issue a payment for the recoverable depreciation.

To recover the depreciation, you will need to follow these steps:

1. Document the damage: Take photographs and notes of the damage to your property. This documentation will be useful when filing the insurance claim.

2. File the claim: Contact your insurance company as soon as possible after the damage occurs. Provide them with the documentation of the damage and any other information they request.

3. Obtain estimates: Get estimates from contractors or repair professionals for the cost of repairs or replacement. Provide these estimates to your insurance company.

4. Complete the repairs or replacement: Once your insurance company approves the claim, you can proceed with completing the repairs or replacement of the damaged property.

5. Submit proof of expenses: After the repairs or replacement are complete, submit proof of the expenses to your insurance company. This may include invoices, receipts, or other documentation.

6. Receive payment: After reviewing the proof of expenses, your insurance company will issue a payment for the recoverable depreciation.

It is important to note that not all insurance policies include recoverable depreciation coverage. You should review your policy carefully to understand what coverage is available and what your responsibilities are when filing a claim.

Recoverable depreciation is an important concept to understand when filing an insurance claim for property damage. It represents the difference between the ACV and RCV of the damaged property and can be recovered by completing the repairs or replacement and submitting proof of expenses to the insurance company.

If your insurance company is wrongfully withholding recoverable depreciation, contact an experienced insurance claims attorney. Here at Conte Injury Lawyers, we have a strong track record of asserting policyholder rights under insurance policies. We can help obtain the compensation you deserve – and we won't get paid until we do. Call 888-333-9833 for a free claim evaluation and let us fight for you.