In recoverable depreciation, can ins co require proof of work done to get settlement check?
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Asked August 27, 2015
Recoverable depreciation is a type of insurance policy that allows the policyholder to recover depreciation that has occurred since the original purchase of an asset. Typically, this type of policy is used for property insurance, where the insurance company will only pay out the actual cash value (ACV) of a damaged item at the time of the loss, rather than the full replacement cost. When a policyholder makes a claim under a recoverable depreciation policy, the insurance company will usually require proof that the damaged item has been repaired or replaced before releasing the full settlement amount. This is because recoverable depreciation policies are designed to incentivize policyholders to repair or replace damaged items rather than simply cashing out the settlement check and keeping the damaged item. In most cases, the insurance company will require proof of the work done to repair or replace the damaged item. This can include receipts for parts and labor, invoices from contractors or repair services, or photographs of the repaired or replaced item. The purpose of requiring this proof is to ensure that the policyholder has actually made the necessary repairs or replacements before receiving the full settlement amount. It's important to note that the specific requirements for proof of work done can vary depending on the insurance company and the terms of the policy. Some policies may require more detailed documentation, such as a written estimate from a contractor or a detailed breakdown of the repair costs. Other policies may be more flexible, allowing policyholders to provide proof of repairs in a variety of formats. If you're unsure about the specific requirements for proof of work done under your recoverable depreciation policy, it's important to review the terms of the policy carefully and contact your insurance company with any questions or concerns.
Answered August 31, 2015 by HomeService