Is your situation covered?
| Scenario | Typical verdict | Why |
|---|---|---|
| RCV policy, first check is ACV (repair cost minus depreciation) | Usually covered | Standard — the holdback is recoverable after repairs. |
| Repairs completed within policy deadline (usually 12–24 mo) | Usually covered | Send invoices; insurer releases the depreciation. |
| Repairs not started by deadline | Usually not | Depreciation is forfeited on most policies. |
| You did the repairs yourself | Depends on wording | Some insurers allow reimbursement of materials only, not labor. |
| ACV-only policy | Usually not | No recoverable depreciation exists — the ACV is the whole payment. |
General industry patterns. Your actual cover lives in your policy wording — PolicyPal reads it for you.
The short answer
Replacement cost policies (RCV) pay in two stages. First check is ACV — replacement cost minus depreciation. After repairs are complete and you send invoices, the insurer releases the withheld depreciation. Miss the deadline (usually 12 or 24 months from the date of loss) and you forfeit that money. Roughly $8,000–$40,000 goes unclaimed per typical roof or water claim because the homeowner didn't file the recoverable-depreciation invoice.
How to claim it back
Complete repairs with a licensed contractor and pay them. Send the insurer: signed contractor invoice showing labor + materials, before/after photos, canceled check or credit card statement proving payment. The insurer releases the depreciation up to the amount you actually spent — not more.
- Match every line item to the original Xactimate estimate.
- Track your policy's deadline — set a calendar reminder at 9 and 15 months.
- Request extensions in writing before the deadline hits.
- Some states prohibit depreciating labor — check the initial estimate for this.
What PolicyPal checks
Upload your policy and Xactimate estimate. We flag your recoverable-depreciation deadline, whether labor was depreciated (illegal in some states like Kentucky and California), matching statutes that force insurer to replace undamaged materials, and code upgrade / ordinance-or-law coverage that adjusters routinely omit.
Common traps
Contractor bills labor and materials as a lump — insurer refuses to release depreciation without itemization. Homeowner accepts a cash-out settlement (which forfeits recoverable depreciation). Repairs done by unlicensed handyman — insurer rejects proof of loss. Partial repairs — you only recover depreciation on the portion actually completed.
Frequently asked
- How is depreciation calculated?
- Age × condition on a schedule. A 15-year-old roof with 25-year expected life is usually depreciated 60%.
- Can I DIY the repairs and claim recoverable depreciation?
- Sometimes — many insurers allow reimbursement of materials receipts only. Not labor.
- What if my repairs cost less than the estimate?
- You receive depreciation up to actual spend. Doing it cheaper doesn't get you the full estimate.
- Does the mortgage company hold the depreciation?
- Often yes on large losses. They release funds as repairs progress with lien waivers from your contractor.
- Can I get an extension?
- Most insurers grant one if you ask in writing before the deadline and show contractor scheduling delays.
- Is recoverable depreciation taxable?
- No — insurance proceeds to restore a home to prior condition aren't taxable income.
Your policy is the only source of truth
Stop guessing. Check your actual policy.
Generic answers don't pay claims. PolicyPal reads your policy wording in seconds and tells you, in one sentence, whether you're covered.