What does net claim if depreciation is recovered mean?
Short answer. It is the line at the bottom of many insurance estimates showing the most you can expect to receive in total once the work is done and the held back depreciation is paid: replacement cost minus your deductible and minus any non-recoverable depreciation. It is not paid up front; your first check is the smaller net claim line above it.
How the lines relate
- Net Claim equals replacement cost value minus all depreciation minus the deductible. This is your first payment.
- Total Recoverable Depreciation is the amount held back.
- Net Claim if Depreciation is Recovered equals the net claim plus the total recoverable depreciation.
Example
Replacement cost is $16,200, depreciation is $5,400, all recoverable, and the deductible is $2,000. The net claim is $8,800. Net claim if depreciation is recovered is $14,200. If $600 of that depreciation were non-recoverable instead, the bottom line would drop to $13,600.
Why the final total can differ
- Supplements approved later raise it
- Skipped items or a lower final invoice reduce it
- Earlier payments and advances are subtracted along the way
Use it to check your contract
Your roofer's contract price should line up with the replacement cost value on the estimate, with the deductible as your share. If the contract is higher, find out which items the insurer's scope left out and pursue a supplement. If it is lower, expect the insurer to pay only what was spent. See recoverable depreciation for how the held back amount is released.