Depreciation is the dollar amount the insurer subtracts from the replacement cost of your damaged property to arrive at its Actual Cash Value (ACV). It accounts for age, wear, and remaining useful life.
In a typical RCV-policy claim, depreciation is recoverable — meaning you can get it back as a "depreciation holdback" check after you complete the repairs and submit proof.
Watch for
- Excessive depreciation on items that are still in good condition. Adjusters sometimes apply a percentage based on age alone, ignoring actual condition.
- Non-recoverable depreciation clauses in older or non-standard policies. Read the policy or ask your agent.