What Is Recoverable Depreciation?
As building materials age, they depreciate. At the time of loss settlement, the insurance company generally only owes for the actual cash value of the damaged building materials, which is the replacement cost value minus depreciation.
If you have a replacement cost policy, you’re entitled to the withheld depreciation once the repairs are made and you pay the full amount to repair your home.
To get the recoverable depreciation released, you will need a contractor’s invoice that reads “paid in full” along with withdrawal receipts, cancelled checks, or bank statements equaling or surpassing the replacement cost value outlined in the claim settlement.