Understanding Recoverable Depreciation on an Insurance Claim

Understanding Recoverable Depreciation on an Insurance Claim


If you’ve ever had to file an insurance claim for property damage, then you understand how stressful and confusing it can be. There are many terms and concepts that are not familiar to most people, and one of these is recoverable depreciation. In this blog post, we’ll define recoverable depreciation, explain why it’s important, and walk you through the process of recovering it from your insurance company. If you’re in central Florida and need help with your insurance claim, don’t hesitate to contact Ultra Property Damage for a free consultation.


What is recoverable depreciation?

Depreciation is the decrease in value of an asset over time due to wear and tear, obsolescence, or other factors. In an insurance claim, the insurer will often deduct depreciation from the replacement cost of the damaged property. Recoverable depreciation is the portion of that depreciation that can be recovered by the policyholder if they repair or replace the damaged property.

Why is recoverable depreciation important?

Recoverable depreciation can make a big difference in the amount of money you receive from your insurance claim. For example, let’s say you have a roof that was damaged in a storm. The replacement cost of the roof is $10,000, and it has a useful life of 20 years. If the insurer applies a depreciation rate of 50%, they would deduct $5,000 from the replacement cost, leaving you with a payout of only $5,000. However, if you repair or replace the roof and submit receipts to the insurer, you may be eligible to recover a portion or all of that $5,000 in depreciation.

How is recoverable depreciation calculated?

The calculation of recoverable depreciation can vary depending on the specific policy and circumstances of the claim. In general, it is calculated as the difference between the actual cash value (ACV) and the replacement cost value (RCV) of the damaged property. The ACV is the value of the property at the time of the loss, considering its age, condition, and other factors. The RCV is the cost to replace or repair the property with similar materials and quality. Recoverable depreciation is the difference between the ACV and the RCV, subject to any policy limits, deductibles, or exclusions.

How do I recover depreciation from my insurer?

Recovering depreciation from your insurer can be a complex process, especially if you’re not familiar with insurance policies and procedures. The first step is to ensure that your policy covers recoverable depreciation and that you have met all the requirements, such as submitting receipts or proof of repair. Then you will need to submit a claim for the recoverable depreciation, which may require documentation and negotiation with the insurer. It’s often helpful to work with a public claims adjuster, who can advocate for your rights and maximize your claim payout.



Recoverable depreciation is an important concept to understand when filing an insurance claim for property damage. By knowing how it’s calculated and how to recover it from your insurer, you can make sure that you receive a fair and accurate payout. If you’re in central Florida and need help with your insurance claim, reach out to Ultra Property Damage for a free consultation. Our experienced public claims adjusters can guide you through the process and help you get the compensation you deserve.

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