How depreciation works on a claim
Insurers depreciate many line items by age and expected life. A nine-year-old roof with a 30-year life might lose close to a third of its value on paper. On a replacement-cost policy that amount is usually withheld, not lost: you get it back after the work is done, if you ask within the time the policy allows.
Using the calculator
- Add one row per item, with its replacement cost, age and a realistic life expectancy.
- Set the depreciation cap to match your estimate. Many estimates won’t depreciate an item past a set percentage.
- Tick the box if your policy settles at actual cash value only, such as some older-roof endorsements or basic policy forms.
Where disputes usually start
Depreciation on labor, life expectancies that are too short for the material, and ages that don’t match the property’s records all shrink the first check. Those are fair points to raise, and they can be part of an appraisal when the policy’s wording allows it.
Limits
This is straight-line depreciation. Real estimates may use different methods by item. This tool is for planning only. It doesn’t interpret your policy, and the figures you enter are illustrative.
Questions about this tool
Is depreciation gone for good?
Not on most replacement-cost policies. It’s typically recoverable once repairs are complete and documented, within the deadline in your policy.
Can labor be depreciated?
Practice varies by policy and insurer. If your estimate depreciates labor, it’s worth asking how the policy language supports it.
What life expectancy should I use?
Use a realistic figure for the specific material, like the manufacturer’s rating or the life in the insurer’s estimate, and compare them.
