Understanding Depreciation

Another part of the insurance system is something called "depreciation". Often they will withhold a portion of your initial check and call it "depreciation". This is a strategy to ensure you repair your home to its original condition, and not spend the money on other things.

Insurance will determine the amount they will allow for your total repairs under RCV (replacement cost value) on the paperwork you will receive from them. The RCV is the Total amount of money they say you will need to perform the repairs.  They then take your deductible and depreciation, if applicable, from this amount to arrive at an ACV (Actual Cash Value) for the repairs. Most people see actual cash value and think they will have to find a roofer to do the job for that amount.

If you have a recoverable depreciation policy, the amount withheld will be paid by the insurance company after you prove the work was completed; usually by faxing them a final invoice showing the actual amount it took to do the job. Your portion of the deductible is paid directly to the roofer, and the insurance company will send you another check for the depreciation based on the final cost.

So what if the job takes more money than what they budgeted according to the RCV?

That's why you need an experienced company working on your side to make sure everything goes smooth. It's much better to properly adjust your claim in the beginning and have more money approved or "supplemented."  We will contact your adjuster and discuss the job details to prevent any surprises and make sure they include everything that should be replaced before we get started. We will negotiate a fair assessment and perform the repairs without cutting corners. If necessary, we will also help you open a supplemental claim to cover any additional costs, post installation.