What does total net recoverable depreciation and costs incurred mean?
Short answer. It generally means what you can still collect once the work is done: the depreciation the insurer held back, plus amounts some policies pay only when actually spent, such as code required work, net of anything already paid. The exact items behind the figure are listed in your insurer's payment letter or estimate summary, and you can ask the adjuster for a line by line breakdown.
Breaking the phrase apart
- Recoverable depreciation: the age deduction held back from your first check, payable after repair or replacement.
- Costs incurred: items many policies pay only after you actually spend the money, such as code upgrade work under ordinance or law coverage, and in some cases overhead and profit.
- Net: after subtracting anything already advanced or paid.
Why it is a maximum, not a promise
The figure assumes you complete every line on the estimate at or above the estimated cost. If your contractor's invoice is lower, or you skip an item, the release shrinks to match. If the crew finds hidden damage, the total can go up through a supplement.
How to collect it
- Finish the work and keep the final invoice.
- Document code items separately, with the permit or inspector requirement that triggered them.
- Send the package with your claim number and ask for a revised statement of loss showing what was released.
If the letter does not add up
Ask the adjuster which lines make up the total, then compare them with the recoverable depreciation on the estimate summary and any code lines. See code upgrade coverage and recoverable depreciation.