How depreciation works on a claim
Depreciation is the reduction for age and condition. On a replacement cost policy, the first payment is usually replacement cost minus depreciation minus the deductible. The depreciation is ‘held back’ and paid once you complete repairs and submit proof, if you do so within the policy’s time limit.
Why Nevada roofs depreciate fast on paper
Insurers often assign short lifespans to roofing components in desert climates. A concrete tile may last for decades while the underlayment beneath it is depreciated much faster. Check the age and life used for each line; small changes make a big difference.
Things to check on your estimate
- Are ages and lifespans realistic for each item?
- Is depreciation applied to labor? Some policies and practices differ on that.
- Is a depreciation cap applied?
- What is the deadline to complete repairs and claim the holdback?
All example figures are illustrative.
Questions about this tool
Can depreciation be disputed in appraisal?
Often yes, because it affects the amount of loss. Ages, lifespans and condition are common panel topics.
What if I don’t repair?
On many replacement cost policies you receive only the actual cash value until repairs are completed.