What Is Recoverable Depreciation in Home Insurance?
It's the gap between your item's cash value and its replacement cost, paid back once you complete repairs and show receipts.
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If your policy pays replacement cost, the first check covers actual cash value, what the damaged roof or flooring was worth used, not new. The recoverable depreciation is the rest, held back until repairs happen. To get it, you file a completion form or send receipts and invoices showing the work was done, matching what the adjuster's estimate listed. Most policies set a deadline for this, often around 180 days from the first payment, and it's on your declarations page or the claim paperwork. Miss it, and that money stays with the insurer.
Recoverable depreciation can run into thousands of dollars on a roof or a whole-floor replacement. It only comes back if the receipts match what the adjuster's estimate scoped, and if they don't, the gap stays with the insurer. Before signing off on a first-time claim, it helps to see whether your policy's depreciation terms are standard or worse than what another insurer offers at renewal.
What if the repair ends up costing more than the adjuster's estimate?
The adjuster's estimate is a starting number, not a ceiling or a fixed contract price. If a contractor opens up the roof or the wall and finds more damage than the estimate accounted for, that's a supplement, an added amount tied to the same claim. You or the contractor send the insurer the documentation, usually photos and an updated line-item estimate, and the insurer reviews it before paying anything more. This is normal and common on larger jobs, especially roofs, where hidden rot or code upgrades only show up once work starts.
Supplements move on their own timeline, separate from the recoverable depreciation already held back. It helps to keep the two straight. Depreciation is money already counted in the original estimate, just not released until repairs are done. A supplement is new money for damage the original estimate missed. Both require paperwork, but they're not the same request, and mixing them in one phone call or one email to the adjuster tends to slow both down.
Contractors who do a lot of insurance work often handle supplements directly with the adjuster, since they know what documentation gets approved without a second round of questions. If your contractor offers to do this, it's worth letting them, since it's their estimate being compared against the insurer's. If you're working without a contractor who does this routinely, ask the adjuster directly what format they want for a supplement request before submitting one, since insurers vary on this and a rejected submission just adds weeks.
None of this is guaranteed to be paid in full. The insurer can still disagree with part of a supplement, the same way they can with an original estimate, and the appeal path is the same one used for an underpaid or denied claim. Keep every invoice, photo, and estimate revision in one place as the job progresses, because a claim that drags on for months is much easier to argue with records than from memory.
What happens if the contractor goes out of business before repairs finish?
Recoverable depreciation only comes back once repairs are done and documented, which assumes the contractor who started the job is still around to finish it and provide the paperwork. If a contractor shuts down, disappears, or quits mid-project, the repairs stall and so does the depreciation. The insurer still wants proof the work matches what was paid for. Without that, there's nothing to submit.
The first step is figuring out what's actually finished. Get a second contractor to look at the property and write up what's done, what's left, and what it will cost to complete. This new estimate doesn't replace the adjuster's original scope, but it tells the insurer where the job stands and gives them something to compare against. Keep any invoices or payments already made to the first contractor, since that money counts toward what's been spent even if the receipts look incomplete.
Call the adjuster before hiring someone new. Claims with a change in contractor sometimes need the insurer to review the new estimate before work continues, especially if the new contractor's numbers run higher than the original. This isn't optional paperwork. Skipping it risks a dispute later about whether the new costs were ever approved, which can delay the depreciation payout even after the repairs are finished.
The 180-day deadline, or whatever window the policy sets, usually doesn't pause because a contractor failed. If the delay is going to push past that date, ask the insurer in writing for an extension and explain why. Insurers handle this differently, and some grant extensions routinely when a contractor issue is documented, but it has to be asked for before the deadline passes, not after. A claim already in progress is easier to extend than one that's already closed.
Before you sign anything
Find the completion deadline for recoverable depreciation in your claim paperwork or declarations page, and set a reminder well before it. Compare your policy's terms against other offers before renewal.
