Does insurance cover depreciation on a roof claim?
Short answer. Only under replacement cost coverage, and only once its conditions are met. Insurance does not cover depreciation when the roof is on actual cash value terms or a payment schedule, when items are marked non-recoverable, when the work is never done or is finished after the policy's deadline, or to the extent the work costs less than the estimate.
When depreciation is covered
With replacement cost terms, the insurer pays actual cash value first and holds back the recoverable depreciation. After you repair or replace the property and send proof, it releases the held-back amount, up to what you actually spent.
When it is not
- ACV roof terms: an ACV roof endorsement makes roof depreciation non-recoverable.
- Payment schedules: the schedule's percentage is the whole roof payment; see roof payment schedules.
- ACV-only policies: some basic policies pay actual cash value on the whole dwelling.
- Non-recoverable line items: some items may be marked non-recoverable even on a replacement cost policy.
- Work not done: if you never repair or replace, you keep only the actual cash value.
- Missed deadline: many policies require completion or notice within a set period.
- Lower actual cost: if the work costs less than the estimate, the release shrinks accordingly.
How to protect the depreciation you are owed
- Read the estimate summary to see what is recoverable.
- Put the completion deadline on your calendar, and ask for an extension in writing if you need one.
- Make sure your contract covers the full scope in the estimate, plus approved supplements.
- Submit the final invoice promptly.
Not sure which terms you have? Compare them in ACV vs RCV, then follow recoverable depreciation to collect it.