What Is Recoverable Depreciation?

Virtually every property insurance claim will include depreciation. Do you know the difference between recoverable and non-recoverable depreciation? More importantly, do you know which type your policy coverage includes and how that will affect you if you file a claim?
If you don't understand how depreciation works on your insurance claim, then watch this brief video that explains it and how it will affect you if you file a claim.
Check out our blog to learn more! blog.homestead...
Homestead Roofing, Inc is a licensed and fully-insured roofing contractor in Colorado Springs, Colorado and serving homeowners in Colorado Springs, Fountain, Falcon, Peyton, Manitou Springs, and other surrounding communities.
Visit the Homestead Roofing website for a lot more information, education, scam alerts, and tips at homesteadroofin... or call our office at 719-433-6991 if you have any questions about this, or any other roofing-related topics.

[@Matt-ic1po]

Thanks for the video. I just came across this situation and almost freaked out. The insurance adjuster sent me a full replacement roof minus Recoverable Depreciation and I almost freaked out. At least I know that I will get another check after the roof has been replaced.

[@JayN4GO]

Thank you. We got hit with 90mph winds here in Ky on March 3rd. Luckily I had RD on my policy. You helped me understand what the adjuster told me today. He had 100 homes to inspect today alone.

[@homesteadroofing]

Nice! I'm really glad this info helped you!

[@clinroatan]

Thank you for explaining this! I too bit through a nail when I saw the 1st offer,

[@brianpalay2]

Quick like and comment for explaining what I saw on my estimate. Thanks!

[@KSOLOMON22]

Thank you! You’ve done a better job explaining this than my insurance company!

[@homesteadroofing]

I'm really happy that it was helpful for you!

[@christopherbloomer6146]

@@homesteadroofing I recently had my roof repaired and some other damage as well. Because of the COVID-19, I accomplihed a lot of the work myself in conjunction with the contractor who gave me a break on the cost. I turned in my receipts and was surprised that I did not receive my recoverable depreciation. Am I supposed to send in an invoice for my labor in order to get the remaining recoverable depreciation?

[@user-hm5zb2rn2z]

Thanks very much for your great explanation. I was actually panicking when I saw "Recoverable Depreciation" in my insurance estimate for a hail damage. I thought I had a crappy policy of not having full replacement cost. Thanks to the "Walk in the Park Series," I am happy-dude and about to take a walk in the park.

[@homesteadroofing]

Nice! Very glad to hear that this was helpful for you! That feedback is very much appreciated.

[@candlechef6786]

Best explanation of this particular subject that I have found on youtube. Thank you so much way to go great channel

[@homesteadroofing]

Thank you so much!

[@dorseysmith9399]

Thank you so much for this explanation! It was the. best and most thorough! Now I understand!

[@homesteadroofing]

@Dorsey Smith - I'm glad this helped you!

[@davidnorris9670]

That explains the recoverable depreciation, but you didn't go over the deductible. Using your scenario of a 10k roof that's a 30 year shingle and is 33% through it's lifespan and you have a $1000 deductible, the insurance is only paying $9000 of the $10000, the homeowner is responsible for the $1000 deductible, so the insurance isn't sending you $6000 in the first check, it'll be $5000, with $4000 recoverable depreciation. If a roofer does the roof for $8000, when the insurance company receives his final invoice of $8000, the carrier is only going to release $2000 of the depreciation, leaving the homeowner still owing their $1000 deductible to the contractor (and have most likely received a shoddy roof install). People don't understand that for a contractor to "eat" your deductible, you're asking them to do a couple of things that aren't in your best interest. First, you're asking them to give up $1000 on the install. That's a lot of money on a 10k roof, so any that are willing to do this are going to make it back up somewhere (they are in business to make a profit and have operating costs). Second, the only way they can do this is to get you the FULL depreciation amount. To do that, they're going to have to send a false invoice to the insurance company saying they did the roof for the insurance estimated amount and then invoice the homeowner for $1000 less. The act of sending a false invoice to an insurance company is felony insurance fraud, and the homeowner has allowed the contractor to make them a part of it. Homeowners have to ask themselves, is the amount of my deductible worth being a player in felony insurance fraud?

[@homesteadroofing]

Thank you for the input. We have over 200 videos on our channel and I explain that in several of them. I totally agree with you... A homeowner must understand that if he hires a roofer who will "waive" his deductible, then he will look for other ways to reduce that loss. No roofer can stay in business when he loses $1000 or more on every job. Good points!!

[@dannybirkholz]

Very clear. Very helpful. Thank You

[@jaycracra]

what happens if the invoice was sent to the insurance company and they cut the check but you decide to keep it ?

[@homesteadroofing]

If I understand your question correctly, that's called insurance fraud. But I may be missing something in what you're asking.

[@nycliving5798]

Is it like deductible?example if replacing a drywall is 4k and insurance paid 3k with 1k deductible. After the job is done they pay you back the 1k?

[@homesteadroofing]

Nope. In your example, if your deductible is $1000, you don't get that money, but you have to pay it to your contractor.

[@kimla4807]

I file a roof claim recently. Got approved but the check sent to me was a ACV instead of RCV. So I call my insurance n ask them explains to me. He said I got RCV policy but my roof was over 15 years old when I file my claim n I only get Actual Cash Value. He also said if file before the years old roof I would get RCV. Bottom line file roof claim under 15 years old if approved will get RCV. After 15 years old file claim if approve would get ACV. Is that true sir??? Thanks 🙏

[@homesteadroofing]

Thank you for the question. Your situation will be decided exclusively by your policy, which is your contract with the insurance company. The best thing for you to do will be to read your most recent declaration document that you received from your insurance company, as well as the original policy document you signed. Those will explain what your coverage is. Sorry I couldn't be more help.

[@christina678]

What if the insurance sends you a check based on their own estimate, but it doesn’t cover the cost of repairs and you can’t make up the difference out of pocket? What happens then?

[@homesteadroofing]

It will depend a lot on what the scope of the actual repairs are. Oftentimes your contractor can get this worked out with the insurance company, but if not, you should consider using a public adjuster or an insurance appraiser. Watch this video and see if it helps you. kzbin.info/www/bejne/i5bXhqmarLR6q9U

[@MrTexaz101]

Thanks for the education. What if you missed the insurance deadline to claim the recoverable depreciation? I just found out about this and found I had a near $2k amount the the insurance will not pay on my South Carolina roof.

[@homesteadroofing]

@Saul Ponces, see my reply on your other comment on the other video.

[@irismarshall2839]

Thanks for explaining this!

[@homesteadroofing]

No problem. I'm glad that it was helpful.

[@andrewpaul1207]

if an adjuster come sout and says "this job should cost 2000 dollars" . you go and get it repaired for 2500. will they make an adjust ment?

[@homesteadroofing]

As long as the costs can be justified and shown to be reasonable, however, I wouldn't recommend filing a claim for a repair that is only worth $2000 or $2500. It's not worth having a claim on your record for something that small, as that will count against you. Also, by the time you pay your deductible (probably around $1000), you're not getting much benefit from your claim. I'd recommend paying this one out of pocket.

[@aadithyaks]

I got my question...answered.Great 👍Thanks

[@homesteadroofing]

Happy to help

[@redboy6889]

Nice...but I am not clear on one part of your example. Insurance company pays you $6000 in advance ( $10,000 - $4000 RD )...the roofer fixes it for $8000....I submit invoice....I get additional $2000...not $4000 ...correct ? If , hypothetically , roofer charges $5000....I submit invoice..do I pay back $1000 to the insurance ?

[@homesteadroofing]

Good question. If the claim is $10k, and you get $4k up-front, then you will receive the remainder (called the Depreciation) once the carrier receives an invoice showing "costs incurred." If you have a $1000 deductible, then in this example, your 2nd check will be $5000 - IF your carrier gets an invoice for $10k. If you send your carrier an invoice showing that you've paid a roofer $8k, then your 2nd check will be $3k instead of $5k. That's why it makes no sense to get a bunch of estimates and go with the lowest one if your project is part of an insurance claim. Instead, meet with several contractors, and hire the one you trust the most.

[@redboy6889]

@@homesteadroofing Thanks but my question was , if the repairs happen to be less than upfront money...... Upfront = $6000 ; Total repair cost = $5000 , RD = $4000 ; Total claim estimate by insurance = $10,000..... Now , do I need to pay back the insurance $1000 since upfront is more than total repair cost.....

[@user-jk2pf1qx3u]

but what if the insurance took my deductible from the 10000 already. I do have recoverable depreciation

[@alberthernandez4975]

As a homeowner can I invoice for the depreciation?

[@homesteadroofing]

Yes you can.

[@christinegerken]

What if they throw extra bundles in the dumpster

[@homesteadroofing]

If they're full bundles, that's bad. What a waste.