What is depreciation in roofing?
Short answer. In roofing, depreciation is the loss of value a roof suffers as it ages and wears, and insurers use it to reduce what they pay on older roofs. It is calculated from the roof's age, the material's expected life, and its condition, and on a replacement cost policy the depreciated amount is paid back after the roof is replaced.
What actually wears out
- Granules: they shield the asphalt from the sun, and they loosen and wash into the gutters over time.
- Asphalt: it dries out and turns brittle with heat, especially over poorly ventilated Georgia attics.
- Sealant strips: they lose grip, making shingles easier for wind to lift.
- Flashing and pipe boots: rubber boots often crack long before the shingles fail.
Depreciation on a claim is the insurer's estimate of how much of that useful life is used up.
Depreciation versus damage
Wear is not covered; it is what depreciation accounts for. Storm damage, such as hail bruises or wind-creased shingles, is covered. An adjuster subtracts depreciation for the wear while paying for the damage. That is why a 15-year-old roof can still get a replacement approved, just with a large holdback or deduction.
Three kinds you may hear about
- Recoverable: held back, then paid after replacement.
- Non-recoverable: deducted for good on actual cash value roofs.
- Tax depreciation: for rental properties, spread over 27.5 years and unrelated to claims.
Related: wear and tear vs hail damage, ACV vs RCV, and recoverable depreciation on a roof.