Do I get all my depreciation check once repairs are done?
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We filed a claim with our insurance company for storm damage. They sent the initial check to the mortgage company. We know we will be issued the full amount of the check and can keep any monies left over after all repairs are complete. The insurance company kept a chunk for depreciation. Are we entitled to those funds as well or only any additional monies if we exceed the amount of the initial check?”
Asked July 31, 2018
The reimbursement of depreciation funds will depend on your homeowner's insurance policy. There are two types of policy clauses that affect your situation, a recoverable depreciation or a non-recoverable depreciation. Whichever your policy states are the best way to know if you will receive any additional monies.
The process of determining the reimbursement amount is based on a standard calculation. The Actual Cash Value (ACV) of your home is the Replacement Cost (RC) minus the depreciation of the property. The ACV was the amount settled in your claim.
If your policy states that the reimbursement is non-recoverable, then you will not receive any additional money from the insurance company. If the policy states that the reimbursement is recoverable, then the replacement cost is refundable. Look at your policy for the words recoverable depreciation or replacement cost.
If you have any questions, then contact your agent to ask about these and other types of property coverage that you may not be aware is included. If you do not feel that your questions are answered to your satisfaction, then contact the consumer services for the state of West Virginia to find out the proper recourse to take.
Answered August 1, 2018 by jlee