Guides

Recoverable depreciation: how to get the rest of your claim

If your homeowners policy pays replacement cost, the first check is usually only the actual cash value: the replacement cost minus depreciation. The depreciation is held back until you repair or replace.

How to collect it

1. Finish the repairs (or replace the item).
2. Get the final invoice and proof of payment from your contractor.
3. Send them to the insurer with a short written request to release the recoverable depreciation.
4. If the real cost was higher than the estimate, include that too: many policies pay the actual cost up to the limit.

Watch the deadline

Policies set a time limit to complete repairs and claim the holdback, often 180 days to 2 years. Some states set minimums: California, for example, gives at least 12 months, and 36 months after a declared state of emergency (Cal. Ins. Code §2051.5). If you need more time, ask in writing before the deadline.

Common mistakes

• Never claiming it. Many homeowners assume the first check was final.
• Missing the deadline.
• Not asking whether labor was depreciated. In several states depreciating labor is restricted.

Lineitemly tracks the held-back amount and the deadline, and writes the release request for you.