How to Collect Recoverable Depreciation: Step-by-Step

On a replacement-cost policy, the insurer holds back part of your money until the work is finished. That holdback is recoverable depreciation, and it is frequently the larger of the two checks. Homeowners lose it by missing paperwork or a deadline.

The two-check structure

Payment	When	What it is
ACV check	After scope approval	Replacement cost minus depreciation minus deductible
Depreciation check	After work is complete and invoiced	The withheld depreciation

Example on a $20,000 approved roof, $2,500 deductible, $7,000 depreciation:

Line	Amount
RCV	$20,000
Less depreciation	-$7,000
Less deductible	-$2,500
First check	$10,500
Depreciation released after completion	+$7,000
Your cost	$2,500

Step 1 — Confirm you have RCV, not ACV

Read the loss summary page of the scope. If it says depreciation is non-recoverable, there is no second check and you should plan accordingly. If it says recoverable, keep reading.

Step 2 — Find the deadline before anything else

Policies set a period to complete repairs and claim depreciation — commonly measured from the date of loss. Miss it and the holdback is gone.

Call the carrier and ask, in these words: "What is the deadline to complete the work and submit for recoverable depreciation on this claim, and can I get an extension in writing if the schedule slips?" Write down the answer and the rep''s name.

Step 3 — Actually do the work

Depreciation is released for work performed. If you take the ACV check and repair only part of the damage, the carrier owes only the depreciation on what was completed.

Step 4 — Assemble the completion packet

Carriers want:

Document	Detail
Final invoice	Line items matching the approved scope, showing total = RCV or the actual final cost
Certificate of completion	Signed by you and the contractor
Completion photos	Finished roof/siding/interior
Permit final / inspection card	If your city required a permit
Any supplement approvals	So the released amount reflects the revised RCV

Step 5 — Submit and follow up

Email the packet to the claim rep with the claim number in the subject line. Ask for written confirmation of receipt. Follow up every 5–7 business days.

Step 6 — Watch for the mortgage company

If your loan servicer is named on the check, it must be endorsed by them. That process has its own steps:

1. Call the servicer''s loss-draft department before you deposit anything
2. Ask for their required forms (usually a loss-draft package)
3. Expect inspections at milestones for larger claims
4. Funds are often released in stages — 1/3, 1/3, 1/3 is common

Start this on day one. Servicer delays are the number-one reason a properly approved claim stalls.

Step 7 — Reconcile the final numbers

Add: ACV check + depreciation check + your deductible. That total should equal the final approved RCV including supplements. If it does not, ask for a line-item accounting.

Common ways homeowners lose the money

• Never completed the work
• Completed it after the policy deadline
• Never submitted a final invoice
• Cash-settled with a contractor who invoiced less than the scope, reducing the release
• Signed over the claim and never followed the payout

Keep a claim file

One folder: scope, all estimates, all emails, all checks, invoice, permit, photos. If anything is disputed a year later, that folder is your case.

We provide the completion packet — invoice, certificate, photos, and permit final — as a standard part of every insurance job.