What is Recoverable Depreciation?

Recoverable depreciation is the portion of an insurance claim that covers the difference between an item’s current, depreciated value (Actual Cash Value) and the cost to replace it new (Replacement Cost).  It is withheld by insurers until you provide proof that repairs or replacements are completed.

Actual Cash Value (ACV) is the amount an item is worth at the time of loss, calculated as its replacement cost minus depreciation (age, wear, and tear). It represents the current market value rather than the cost to buy a new replacement. ACV policies offer lower premiums but provide smaller payouts than Replacement Cost Value (RCV) policies.

An ACV (Actual Cash Value) schedule, often referred to in insurance as a Roof Payment Schedule (RPS) or similar depreciation table, is a per-determined, age-based chart used to calculate the payout for a damaged item by subtracting depreciation from its replacement cost. It determines the value of assets, like roofs, based on their remaining lifespan rather than current market replacement costs.

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This blog is NOT legal advice. It is not insurance policy advice. You should consult and attorney and/or a licensed insurance agent for your specific situation.