What Are Depreciation Charges on a Home Insurance Claim?
It's the value subtracted for age and wear on damaged items, held back until you complete repairs and show receipts.
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ACV versus replacement cost
If your policy pays actual cash value, depreciation comes out and stays out. If you have replacement cost coverage, the holdback comes back once you finish repairs and send receipts. Your declarations page tells you which one you have.
Recoverable versus non-recoverable
Recoverable depreciation is money you get back after the work is done. Non-recoverable means it's gone for good, often applied to roofs or older items. The claim paperwork should say which kind applies to each damaged item on your loss.
How age reduces the number
The adjuster figures a usable lifespan for each damaged item, like fifteen years for a roof, then subtracts a percentage based on how much of that life is used up. A ten-year-old roof loses more value than a two-year-old one.
What receipts must show
To collect held-back depreciation, you need to complete the repair or replacement and send proof of what it cost. Save contractor invoices and itemized receipts for damaged contents, since the insurer pays the difference only after seeing them.
If your policy pays actual cash value instead of replacement cost, that depreciation never comes back, which can leave thousands uncovered on a roof or an older kitchen. Whether you're weighing a new policy before you file or checking what you're owed on a claim already underway, it's worth seeing what another insurer offers for the same coverage, since the ACV versus replacement cost choice gets made again at every renewal.
How long do you have to send in those receipts?
Insurers set a deadline for claiming recoverable depreciation, and it is usually measured in months, not weeks. Many give you 180 days from the date of the claim or the adjuster's estimate. Your policy or the claim paperwork sets the actual number for your loss, so it is worth finding that date early rather than assuming you have as much time as you think. Miss it, and the holdback that was yours to collect stays with the insurer.
Repairs take time to schedule, especially after a storm hits a whole neighborhood at once and every contractor in the area is booked. If you are waiting on a roofer or a contractor and the deadline is approaching, call the insurer or your agent and ask about an extension before the date passes, not after. Some will grant one if you explain the delay. None will grant one retroactively once the window has closed.
Partial progress usually counts. If you have replaced the roof but not yet the fence it damaged on the way down, you can typically submit receipts for the finished work and claim that portion of the depreciation while the rest of the repair is still pending. Check with the adjuster handling your file on how they want partial claims submitted. Insurers differ on whether they want one final package or are willing to process pieces as they come in.
Keep a copy of everything you send, and send it in a way that gives you a record. Use the insurer's claims portal if they have one, or an email you can point back to later. Adjusters move between files constantly, and a receipt that gets lost in the shuffle becomes your problem to prove, not theirs. If depreciation you expected does not show up in a payment, a dated copy of what you submitted and when is what settles the question quickly instead of starting a dispute from nothing.
What if the repair costs more than the original estimate?
Adjuster estimates are written before a contractor opens a wall or pulls up a roof and finds out what's actually underneath. Rot, outdated wiring, a layer of old shingles the estimate didn't account for. When the real cost of repair comes in higher than what the insurer first calculated, you're not stuck with the gap by default. You can go back and ask for a supplement.
A supplement is a request to revise the claim once you have a reason the original number was too low. The strongest version of this request is a contractor's written estimate or invoice that itemizes what was found and what it costs to fix, not just a verbal total. Photos of the hidden damage help too, taken before it gets covered back up during the repair. Send this to the adjuster assigned to your file and ask them to review it against the original scope.
The holdback on depreciation was calculated against the first estimate. If the final repair cost is higher, the recoverable depreciation on the added work needs to be recalculated too. That usually means another round of paperwork rather than an automatic adjustment. Save every invoice from the added work, note the date you submitted the supplement, and keep a copy of what the adjuster approved or denied in response.
Insurers don't always approve a supplement in full. Some will cover the hidden damage but push back on pricing if the contractor's rate is well above what's typical for the area. If that happens, ask what comparison the adjuster is using and whether a second contractor estimate would change the outcome. A denial on a supplement is not the end of the conversation, but it does mean the burden is on you to show the added cost was necessary and reasonable, which is exactly what the contractor's documentation is for.
Before you file anything else
Pull your declarations page and find the deadline for recoverable depreciation, often 180 days from the claim date. Mark it now, and call the insurer early if repairs are running behind schedule.
