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 Apr 07, 2010 02:07 pm Post Subject: Roof Replacement
We had hail damage to our roof and insurance is going to replace it. I am new to this and want to make sure I understand correctly.
The adjuster came out with a local roof contractor, each gave an independant estimate for approximately $6,400 total RCV. My deductable is $1000, and pending holdback DEP is approximately $600. Thus, the fisrt check they will be sending me is to be approximately $4,800.
My wife and I are a young couple and although we are glad to be getting a new roof, $1000 unexpected expense is relatively large for us. I have a quote from another local contractor that does a lot of work for the same insurance company, they are at approximately $4,800 total for replacing the roof. So my question is, if I use the lower priced contractor, the issued check from insurance will cover cost to replace, I quess I would not apply for the $600 hold back depreciation amount after competion, but would the insurance company be calling me asking me to pay them back $1000 for the deductable since I basically will get the work completed for close to the amount of their initial ACV estimate and issued first check amount.
I'm not trying to make money or scam anyone, just trying to make the out of pocket cost for us less due to an unexpected $1,000 deductable amount.
Thanks
Posted: Wed Apr 07, 2010 10:40 pm Post Subject:
I quess I would not apply for the $600 hold back depreciation amount after competion,
correct...but would the insurance company be calling me asking me to pay them back $1000 for the deductable since I basically will get the work completed for close to the amount of their initial ACV estimate and issued first check amount.
no...in fact you will most likely not hear from them again...or if you do they may send you a letter reminding you about your recoverable depreciation claim, let you know how long you have to file it etc.....however honey, you might run into a problem with how the draft will be issued....more than likely they will have to issue it to you and the contractor or you and your mortgage company, (minus your ded and rec. dep)...well you could I guess tell them that this (your) roofer will work from their estimate, therefore you want it to you and them...that would be your best option...they may HAVE to issue it to you and your mortgage company..if so just call them and see how/when they will release the funds to the roofer...be sure you have all of this ironed out before the first shingle flys.. :wink:I'm not trying to make money or scam anyone, just trying to make the out of pocket cost for us less due to an unexpected $1,000 deductable amount.
I know your not..and I personally have no issue with anyone trying to save their deductible..1k is a lot of money, well to common folk like me anyway :wink:Posted: Sat May 29, 2010 08:53 pm Post Subject: insurance claim
WE HAVE A REVERSED MORTGAGE, WE HAVE A CLAIM, WILL THE RECOVERABLE DEPRECIATION CHECK BE GIVEN TO US.
Posted: Sun May 30, 2010 12:02 pm Post Subject:
Yes, since to collect it you have to pay it yourself.
Posted: Thu Jun 24, 2010 07:40 pm Post Subject: received short depreciation check
i am a contractor and very new to this type of business.
one of the problem i have is that when i sent in the depreciation invoice to insurance i was supposed to put down RCV but instead i put ACV and i subtracted deductible amount from ACV so im short on my depreciation check. do you think i can send an open depreciation invoice to insurance for the difference?
Posted: Wed Nov 03, 2010 04:39 pm Post Subject: additional personal property preimium
Our insurance company has been charging us an additional charge of S82 on top of the charge for 87k for personal property in 2009 and $72 in 2008. Our house caught fire on Dec.19,2009 so what I would like to know do they still show depreciation? On our renewal for 2010 they do not have the additional charge for personal property. :roll:
Posted: Thu Nov 04, 2010 12:47 pm Post Subject:
Your post does not make much sense. Please tell us what the "additional charge" was for, and what kind of policy you have. As far as "showing depreciation" . . . this is something the insurance company determines when a claim is paid, it is not something known in advance.
Posted: Fri Nov 12, 2010 05:11 pm Post Subject: recoverable
recoverable means what after job is complete?
Posted: Fri Nov 12, 2010 05:17 pm Post Subject: house fire
house fire insurance payment to get job done 71,000 total
depreciation amount is 64,000 which totaled 135k what does that mean?
Posted: Fri Nov 12, 2010 11:13 pm Post Subject:
It means that the total loss is $135,000. The insurance company has calculated $64,000 for depreciation. After paying $71,000 to you, if the cost to complete the repairs is up to $64,000 more than that, the replacement cost provision of your policy (if you have one) will reimburse you for the excess cost, up to a total of $64,000.
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