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

1 Answer


Depreciation is a reduction in the value of an asset over time due to wear and tear, and insurance companies may factor it into their claims payments. When a covered loss occurs, an insurance company may initially withhold payment for the estimated amount of depreciation until the property is repaired or replaced. Once the repairs are done and the insurer receives proof of payment, they may then issue a final payment that includes any previously withheld depreciation. This payment is commonly referred to as a "recoverable depreciation" payment. However, it's important to note that recoverable depreciation is not always paid out in a lump sum. Depending on the policy and the insurer, the payment may be issued in installments or as a reimbursement for actual expenses incurred. Additionally, some policies may have a deductible that must be met before depreciation is paid out. It's also worth noting that if the actual cost of repairs exceeds the estimated cost, the policyholder may be responsible for paying the difference out of pocket. In summary, whether or not you receive all of your depreciation check once repairs are done will depend on the specifics of your insurance policy and the payment process outlined by your insurer.

Answered August 1, 2018 by jlee

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