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: Wed Nov 18, 2009 11:52 pm Post Subject:
I have talked to numerous of people, who haven't had to come with the deductible to pay the roofer
Your deductible will come off the loss...every loss, every time...it's the deductible you chose when you purchased your policy...Personally, I believe every insurance company needs to heavily regulated so that the insurer is not getting the shaft.
They are..every state has a dept of insurance..they regulate EVERYTHING...You could have received a total of $5660.44 if all of your property had been repaired.
Das, that isn't how I'm reading the 'guests' post, (and maybe I'm wrong), but what I'm getting is the adjuster wrote an estimate for $6660.44 , but the roofer did the job for $5332.00. I think the roof was replaced, it just didn't cost as much as the adjuster wrote, so the 'guest' is ticked that their deductible didn't disappear when this happened. That's how I'm reading it anyway..Posted: Thu Nov 19, 2009 04:59 am Post Subject:
Your correct, the way you read it works out mathmatically. I missed that.
If the "guest" should be mad at anyone it should be themselves. If they would have listened to their adjuster they would have known that they could have collected up to the estimated amount minus their deductible and then have their roofer "cook" the estimate to make it work out. See what you get for being honest.
Posted: Fri Nov 20, 2009 07:33 am Post Subject:
Yes, you should understand why it doesn't pay the entire replacement cost. Some times it helps us obtain a better explanation if we go through our policy conditions right at the very beginning. It would be better if we all know how things like insurance work and what we may get compensated for.
Posted: Thu Jan 07, 2010 05:37 pm Post Subject: Recoverable Depreciation..roof replacement
The roofing contractor wrote that they would replace my roof per my insurance company's scope. Homeowner is responsible for deductible only. Price based on insurance company replacement cost value. Does the full scope of insurance proceeds include the recoverable depreciation being paid to the roofing contractor? or to the homeowner?
Posted: Fri Jan 08, 2010 01:04 am Post Subject:
If the roofer's price is the same as the insurance company's estimate and all you would owe is the deductible, then yes the roofer would get the holdback amount. .......actually the homeowner would get the holdback amount but would need to forward it to the roofer to pay the agreed contract.
Posted: Sun Jan 17, 2010 07:56 pm Post Subject: sink hole claim
I have an active claim for a sink hole for 3 years. All processes have been done including a neutral evaluation.My insurance company has told me that they will pay to repair my home. If I tell the insurance company that I do not want to repair (no mortgage involved) and would rather cash out, could I cash out? Could the insurance company not pay if refuse to repair?
Posted: Mon Jan 18, 2010 12:14 pm Post Subject:
No they owe the claim whether you repair it or not.
Posted: Thu Feb 11, 2010 08:18 pm Post Subject: question
We had water damage in our home, a company sent by our insurance company did the clean up and sent an estimate into the insurance company for cost of damages. Now we can go with that same company to do the repairs or find our own contractors to do the repairs. In our research we found that we could have the repairs done cheaper if we go with different contractors. Now my question is this, do we get to keep the difference
Posted: Fri Feb 12, 2010 12:28 am Post Subject:
Yes, you can choose the contractor of your choice and keep the difference.
Posted: Fri Feb 12, 2010 07:04 am Post Subject:
Yes, you can choose the contractor of your choice and keep the difference.
Yes you can choose the contractor of your choice and keep the difference. However, if you have not been paid the full amount of the claim and there is a holdback amount you are going to have to send in a final invoice, receipts...whatever to get the holdback amount. If the new contractor does it for less, you will not get the full difference.
If they have paid you in full already, then spend away its yours to do with as you wish.
You may want to check any contract signed with the initial contractor when they did the dry out and make sure there is no wording in their for fixing the damage. You never want any surprises.
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