by info_2 » Thu Apr 16, 2009 02:36 am
Recoverable depreciation is the difference between the cost to replace or repair property and its value before the damage occurred. Recoverable depreciation is the maximum amount of money you can recover from your homeowners insurance company after you have some repair or replacement work on you home. Items that your recoverable depreciation insurer considers recoverable and non-recoverable must be mentioned in the loss settlement provision of your homeowners policy.
Recoverable depreciation can be an important part of your homeowners insurance policy, especially if you need extra money. Homeowners insurance has 2 specific clauses that you may include in your policy. One clause concerns recoverable depreciation.
Recoverable depreciation can be an important part of your homeowners insurance policy, especially if you need extra money. Homeowners insurance has 2 specific clauses that you may include in your policy. One clause concerns recoverable depreciation.
How can you claim recoverable depreciation?
Here are a few simple steps you may follow in order to make your recoverable depreciation insurance claim:
- Review the policy: A claim for recoverable depreciation cannot be made on the actual cash value (ACV). Look at your policy carefully, and look for the recoverable depreciation clause.
- Gather evidence: Your insurance company will require evidence that you repaired your home or replaced the property before they will allow a recoverable depreciation claim. The adjuster will need documents that will help him confirm the value of the house after the damage has occurred.
- Contact the insurance agency: Once you've contacted the insurance company, either online or over the phone, the adjuster will do an appraisal of your home in order to estimate the amount of damage they will compensate you for.
- Depreciation check: Once the insurance company has allowed your claim, they will send you a check. The amount of the check should be the sum of your assets and depreciation minus the deductibles. The check may be made out to you, your mortgage lender, or both of you depending on the value of the check. If it is made out to you and your lender the check must be endorsed by the bank, which will deposit your share into your account.
Related readings
- When can you claim recoverable depreciation?
- Recoverable depreciation after hail damage
- Is there a deadline to file for recoverable depreciation?
- Mortgage settlement and recoverable depreciation
I have a claim that includes some other cosmetic work. To give an example.
My recoverable depreciation is 1K, My deductible is 2.8K. Total settlement is 13.9K. I don't have any mortgage on the house. The first insurance check settlement amount - deductible - recoverable dep = 10.1K. Now my question is if I decide to get the necessary repairs within the 10.1K amount, do I have to still care about recoverable depreciation? I am willing to forgo the recoverable depreciation by trying to fix everything using the first check. Do I still need to submit the work receipts to insurance company if I don't care about getting the recoverable expense? Can the claim close once the timeline to file for recoverable depreciation lapses (usually 180 days).
My recoverable depreciation is 1K, My deductible is 2.8K. Total settlement is 13.9K. I don't have any mortgage on the house. The first insurance check settlement amount - deductible - recoverable dep = 10.1K. Now my question is if I decide to get the necessary repairs within the 10.1K amount, do I have to still care about recoverable depreciation? I am willing to forgo the recoverable depreciation by trying to fix everything using the first check. Do I still need to submit the work receipts to insurance company if I don't care about getting the recoverable expense? Can the claim close once the timeline to file for recoverable depreciation lapses (usually 180 days).
Posted: Sun Oct 25, 2009 09:11 pm Post Subject: Depreciation
Now keep in mind that you cannot "make money" on an insurance claim. Any amount less than the RCV will be subtracted from the depreciation payment. Let's say the RVC for your damages was 10K and you have a 2k deductible and 3k in depreciation. Now you have your repairs completed for 8k, and your contractor sends in a Certificate of Completion or a final invoice to your insurance company. You will only receive 1k of your depreciation back because the RCV has become 8K.
Say what they will "depreciation" is a checks and balances system used to ensure that the insured is paying there deductible. One more thing, Don't let your contractor send in false invoices that is "Insurance fraud" and in most states is a class 3 felony. :(
Posted: Sun Nov 01, 2009 06:15 am Post Subject: rcv depreciation
in most cases,you dont need to spend ALL the money to recover the holdback. if more time is needed,it should not be a problem.
Posted: Mon Nov 02, 2009 09:37 pm Post Subject: RCV Depreciation
That is not a correct statement, the insured has to spend the total amount of the loss to recover 100% of the recoverable depreciation. The reason being if the insured is payed 10k for the loss, but has the work done for 8k the RCV now becomes 8K. You are correct that if more damage is found the insurance company may pay for it. If you find that the RCV is 20% higher than what the insurance company paid you might have a problem then.
Posted: Fri Nov 06, 2009 04:03 pm Post Subject: home claim
who gets the check for less recoverable damages?
Posted: Wed Nov 11, 2009 05:01 pm Post Subject: Check
I'm not sure I understand your question completely but I will try to answer it. If you are talking about the difference between the Insurance company's estimate and the actual repair cost, the insurance company will keep the difference. The insurance company pays the claim based on there estimated repair costs, if you have it done for less you cannot keep the difference. You cannot "make money" on an insurance claim period.
Posted: Fri Nov 13, 2009 06:25 am Post Subject: Recoverable Depreciation
if I have a claim with several different categories of loss. Will the recoverable depreciation be calculated by category or by the entirety of the completed claim?
What I'm asking is do I have to replace everything exactly as valued, or can I spend less on one category and more on another and as long as I've spent at least the total value, then receive all of my recoverable depreciation, or will they withold the depreciation on a single item if it is replaced for less than the claim amount.
Posted: Tue Nov 17, 2009 09:22 pm Post Subject: Recoverable Depreciation
I filed a claim In September 2008 for hail damage to my roof. Due to my wife becoming ill, experiencing several deaths in my family, and the loss of my job, I am just now getting around to having my roof replaced. My mortgage company already has the first check, but will if still be possible to obtain the Recoverable Depreciation amount at the present time.
Posted: Wed Nov 18, 2009 12:34 am Post Subject:
It should be Bryon...just contact your adjuster and explain the situation. Most adjusters are human too, and understand these types of circumstance.. ("most" I said :wink: )
I'm sorry for your struggles and hope your bride is much better now. And you've found a new job.
Posted: Wed Nov 18, 2009 02:52 am Post Subject: Cost of Replacement and Depriciation
I had hail damaged to my roof around August 6 of this year. The adjuster came out and did the estimates:
$6660.44 - Cost Replacement
$1884.47 - Minus Recoverable Depriciation
$4775.97 - Actual Cash Value
$1000.00 - Minus Policy Deductible
$3775.97 - Settlement
I had the roof repaired and the total was $5332.00. After the roof was repaired, I sent the invoice in and was issued a check for $556.00 (recoverable depriciation). Shouldn't I have recovered the full depreciation amount? I have talked to numerous of people, who haven't had to come with the deductible to pay the roofer. Also if ANY insurance company is going to go by the guide line of "Actual Cash Value", there shouldn't be a "Replacement Cost" on the claim that the adjuster writes up.
Personally, I believe every insurance company needs to heavily regulated so that the insurer is not getting the shaft. The insurer pays alot for the replacement of property, but when it come time for a claim, the insurance doesn't want to pay for the total cost of replacement.
Posted: Wed Nov 18, 2009 04:34 am Post Subject:
No you shouldn't receive all the depreciation if you did not have all the work completed. You had the roof replaced and they sent to the recoverable amount for the roof. I assume that there was damage to other items that make up the difference.
As for your deductible...you owe it. Now if your roof waives that, that is on them. Many times roofers will give homeowners breaks on deductibles up to a certain dollar amount for say placing a sign in your yard for X amount of time.
Yes you pay more for a replacement cost policy. The replacement cost provision of the policy does not kick in until such time as the damaged property is repaired or replaced. You could have received a total of $5660.44 if all of your property had been repaired.
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