What Is Recoverable Depreciation? - YouTube

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.