Home & Property

Recoverable Depreciation

The withheld depreciation amount that a policyholder can claim back after completing repairs under a replacement-cost policy.

Last reviewed: May 2026 · Editorial methodology

Definition

When a replacement-cost policy settles a claim, insurers typically issue an initial payment equal to actual cash value (ACV) and withhold the depreciation amount until repairs are actually completed. Once the insured completes the work and provides receipts or a contractor invoice, the insurer releases the withheld depreciation — called recoverable depreciation — as a supplemental payment. For example, if a storm destroys a $30,000 roof with $12,000 of accumulated depreciation, the insurer first pays $18,000 (ACV), then releases $12,000 more after the new roof is installed. Most policies give policyholders 180–365 days after the loss to complete repairs and submit for recoverable depreciation; missing this deadline forfeits the supplement. Contractors and public adjusters often coach policyholders through the recoverable-depreciation claim process because many homeowners don't realize the supplemental check is available. Non-recoverable depreciation policies pay ACV only and never release the withheld amount regardless of repairs.

Where this term matters

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Tip

Glossary definitions are educational. Always check your own policy language — insurers can define common terms differently from one another. When in doubt, request a written explanation from your agent.

Related terms

DepreciationThe reduction in value of property over time due to age, wear, and obsolescence, used to calculate actual cash value settlements.Actual Cash Value (ACV)The depreciated value of property at the time of loss — what your insurer pays minus age and wear.Replacement Cost Value (RCV)The cost to replace lost property with new items of similar kind and quality — no depreciation.

Related guides

Source: Cover Forge USA editorial team|Last verified: May 2026|Methodology
Definitions are educational and may be simplified. Always refer to your policy contract and consult a licensed agent for terms that affect coverage decisions.
CF

Cover Forge USA Editorial Team

Editorial Lead

This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.

Reviewed June 2026

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