How depreciation is estimated here
For each item, depreciation is the item’s age divided by its expected life, multiplied by its replacement cost, up to the cap you choose. Actual cash value is replacement cost minus depreciation. The first payment is ACV minus your deductible.
Recoverable depreciation
Many replacement cost policies let you recover the held-back depreciation after repairs are completed, often within a set number of days. Some policies, especially on roofs or older homes, pay actual cash value only. Tick the box if yours does.
Questions to ask about depreciation
- Was labor depreciated, or only materials?
- Is the age right? Roofs and siding are often older or newer than the estimate assumes.
- Is the expected life realistic for the material?
Questions about this tool
Is depreciation the same as wear and tear?
Not exactly. Depreciation is an estimate of lost value due to age and condition. Wear and tear itself usually isn’t covered damage.
Can depreciation be disputed in appraisal?
Where the policy and the panel treat actual cash value as part of the amount of loss, depreciation can be part of the discussion.
How long do I have to recover depreciation?
Your policy sets the deadline. Check the loss settlement condition, then put the date in the claim timeline builder.