What is depreciation on a home insurance claim?
Short answer. Depreciation on a home insurance claim is the amount subtracted from the cost to repair or replace damaged property to reflect its age and wear. Whether you get it back depends on your policy: replacement cost coverage pays recoverable depreciation after repairs, while actual cash value coverage keeps it deducted.
How it plays out by coverage
- Dwelling: usually replacement cost on standard homeowners policies, so depreciation is recoverable, unless an endorsement changes the roof.
- Roof surfacing: on older roofs, increasingly paid at actual cash value or by a schedule.
- Other structures: often follow the dwelling's settlement terms.
- Contents: often actual cash value unless you added replacement cost coverage.
Why it exists
Insurance aims to make you whole, not better off. A 12-year-old roof or a 6-year-old sofa was worth less than a new one before the loss, so the base value of the claim reflects that. Replacement cost coverage is the extra promise that lets you rebuild with new materials anyway, as long as you actually do.
Questions to ask at renewal
- Is my roof covered at replacement cost?
- Is there a roof age threshold that changes this?
- Are my contents at replacement cost?
- What is my wind and hail deductible?
On an active claim
Look at the depreciation column for each line. If the roof lines show recoverable depreciation, plan to submit the final invoice. If they show non-recoverable depreciation, your roof is on actual cash value terms.
Related: ACV vs RCV, roof age and insurance, and roof payment schedules.