How does recoverable depreciation work on a roof claim?
Short answer. On a replacement cost policy, the insurer first pays the roof's actual cash value, which is the replacement cost minus depreciation and your deductible, and holds the depreciation back. After the new roof is installed and you send proof of the cost within the policy's deadline, the insurer releases the held back amount, up to what the work actually cost.
How it plays out, in order
- Estimate. The adjuster prices the full roof at today's cost, the replacement cost value (RCV), and subtracts depreciation for the old roof's age.
- First check. You receive RCV minus depreciation minus deductible. Your mortgage company may be named on it.
- Contract and install. You sign with a roofer, usually at a price matching the insurer's RCV plus any approved supplements.
- Proof. The final invoice goes to the insurer, often with completion photos.
- Second check. The insurer releases the recoverable depreciation and pays any supplements it approved.
A simple example
RCV is $15,000, recoverable depreciation is $4,500, and the deductible is $1,500. The first check is $9,000. Once the roof is done and the $15,000 invoice is submitted, the second check is $4,500. Your share of the roof is the deductible.
What shrinks the second check
- Doing less work than the estimate covered, or paying less than the RCV
- Missing the policy deadline to repair or replace
- Items the policy pays only at actual cash value, such as fences on many standard forms
- A roof endorsement that makes roof depreciation non-recoverable
What it never covers
The deductible is not reimbursed, and in Georgia a contractor cannot legally waive or absorb it. Upgrades you choose, such as a premium shingle the estimate did not include, are also yours to pay. See ACV vs RCV and the full guide to recoverable depreciation.