On Property Insurance Claim Tips Blog

Policyholder Question – Why is my insurance carrier claiming non-recoverable depreciation?

Policyholder Question – Why is my insurance carrier claiming non-recoverable depreciation?

The following is an insurance claim question we answered for a policyholder through the United Policyholders Ask an Expert Forum.

Q. In my original claim, my insurance company said that my 98 year old mother had replacement coverage. We've gone through her contents and submitted a statement of loss. In our findings, most of her contents were 40, 50 or even 100+ year old collectables. In the subsequent settlement, the insurance company increased their payout; however, they now claimed over $30k of items under "non-recoverable" depreciation. How do you verify what is or what is not recoverable under this clause? The policy documents are very vague, tough to read even when you can find them.

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Understanding Depreciation Estimates for Your Property Insurance Claim

When there is a storm event such as the flooding in the Pensacola, Destin, Gulf Breeze and the Ft. Walton Beach areas we always get questions about how depreciation works. As public adjusters, we deal with this type of situation all the time when we are managing a policyholder’s claim. Deprecation is figured in a number of ways depending on who is making the calculations. As an example; in the insurance adjusting field, the text book example is to come up with a percentage based on the age of an item and its full life expectancy. So if an item is one year old and the average life is 20 years the percent to be applied for deprecation is 5%.  If the cost of the item new is $5,000 then $250.00 in deprecation should be taken for each year of life. If an item is 5 years old and the life expectancy is 15 years then 33% would be reasonable.

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Policyholder Question: How Much Depreciation Should be Taken for a Driveway?

Here is an insurance claim question that we answered as a contributing member of experts for United Policyholders who advocates for property owners. 

Q. What, if any, should be acceptable ACV on a driveway and walkway on a personal residence?  House was demolished by fire and working with adjuster on fair settlement value of these surfaces.  Policy provides ACV.

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