Understanding Withheld And Recoverable Depreciation
If you’ve ever filed a property damage claim, you may have noticed terms like Withheld Depreciation or Recoverable Depreciation in your settlement paperwork. These terms can be confusing, but understanding them is key to making sure you receive your full claim payout.
What Is Recoverable Depreciation?
When you experience property damage, most policies initially pay you the actual cash value (ACV) of your loss. This is the replacement cost minus depreciation for age, wear, and condition. The depreciation is often “withheld” by the insurance company until repairs or replacements are actually completed. This withheld portion is known as recoverable depreciation.
Think of it as money that’s set aside until you prove the work is done. Once repairs are completed and properly documented, you can usually collect that additional amount, bringing your settlement up to the replacement cost value (RCV) promised under your policy.
How Do You Recover Withheld Depreciation?
To recover depreciation, policyholders typically must meet specific conditions:
Complete the covered repairs or replacements.
Provide proof of completion, such as paid invoices, receipts, photos, or completion certificates.
Submit all documentation within the deadlines outlined in your policy.
Failing to meet these requirements, or simply missing a deadline, can mean leaving money on the table. That’s why understanding your policy language and the process is so important.
Why ALPHA Adjusting?
ALPHA Adjusting specializes in maximizing property insurance claims so our clients get the settlements they’re owed. Our team reviews your policy, thoroughly documents damages, and ensures that recoverable depreciation is pursued correctly and completely. Insurance companies have their processes. Our role is to protect your interests and maximize your recovery.
