Hi everybody! This is Tracy Bookman owner of Homestead Roofing and welcome to today's
Wednesday walk in the park where we take three minutes to answer your questions
about roof repairs, roof replacements, and the insurance claim process. Today
we're going to answer your question: what is recoverable depreciation?
Depreciation is going to affect just about every homeowner who files a claim
for a property damage on his home. What the adjuster does is he arrives at a
value for the cost of repairing the portion of your home that's damaged and
then they apply depreciation to that based on the age of either the house or
like if it's roof damage based on the age of the roof. So for example if you
have what's considered to be a 30-year shingle on your roof and that was
installed 10 years ago, then effectively you have 33%
depreciation on your roof. So on a property damage claim what's going to
happen is that depreciation amount is going to be excluded from the initial
part of the claim. If you have what's called replacement cost value coverage
on your home then you get that depreciation amount paid back to you. If
you have actual cash value you don't get it. So that's the difference between
recoverable depreciation and non recoverable depreciation. So let's just
use some easy numbers just to make this simple let's say the gesture says that
it's going to be $10,000 to replace your roof and let's say you've got 40%
depreciation that means there's $4,000 that they're going to hold back in the
claim off of that first check that you get. So $4,000 they're going to keep out
of the payment on the initial check that you get for your claim. Again if you've
got replacement cost value coverage then when the job is all done
and the insurance company receives an invoice showing that $10,000 was charged
to replace the roof, then they send you that check for $4,000 you have recovered
that depreciation. So a lot of homeowners yeah kind of panic when they get their
check and it's only $6,000 and they have to go spend $10,000 to get a roof. But
don't panic because if you have recoverable depreciation then you're
going to get that second check for that depreciation amount. So the bottom line
is depreciation affects just about everybody who files a claim on their
home for property damage. You're either going to have recoverable depreciation
or you're going to have non recoverable depreciation and if you have recoverable
depreciation that's going to get sent to you in a second check after an invoice
is received, meaning the insurance company receives
an invoice for the amount that's being charged. So then let's talk about just
one other thing. Let's say your your claim amount is $10,000 but
your roofer is only gonna charge $8,000 to do the roof so you
might be thinking oh man that's great now I can pocket some money. That's not
how it works if the roofer is honest he's going to send in an invoice for
$8,000 and then you just saved your insurance company $2,000
because they're not going to give you that $2,000. I hope
this answers all your questions about this particular issue. I know it can be
really confusing. So if you've got other questions, please give us a call right up
here our phone number 719.433.6991. You
can also visit our website. We've got a ton of videos out on our website lots of
information and education and tips for homeowners right down here Homestead
RoofingColorado.com. Hey and we would love to hear from you also so please be
sure to leave a comment in the comment section below let us know what you
thought of this video but also let us know what questions you have and we'll
try to make another video specific to your question. Subscribe to our channel
please and click the little bell up there at the top so that way you get
notified when we have new videos and until our next walk in the park I'm
Tracy Bookman owner of Homestead Roofing.