When you file a home insurance claim, you might expect one big check to show up. But that’s not usually how it works. Your insurer may hold back part of the payout, which is something called recoverable depreciation. Knowing what that means and how to get that money released can help ensure you receive the full amount you’re entitled to after a loss. Learn more: Homeowners insurance: What it covers and how much you'll pay What is recoverable depreciation? Recoverable depreciation is the portion of your ...

Core Insights - The article discusses the differences between actual cash value (ACV) and replacement cost value (RCV) coverage in homeowners insurance, highlighting how each affects payouts after property damage [2][14][19] Summary by Sections Actual Cash Value (ACV) Coverage - ACV coverage insures property based on its depreciated value, factoring in age and condition at the time of damage [2][18] - An example illustrates that for $10,000 damage with a $1,000 deductible, the payout would be calculated by deducting depreciation [3][6] Replacement Cost Value (RCV) Coverage - RCV coverage insures for the full cost of replacing property without depreciation considerations, typically covering the dwelling part of home insurance [4][10] - In the same damage scenario, RCV would provide a payout of $9,000 after the deductible, without depreciation adjustments [5][12] Types of Coverage - Different types of RCV policies exist, including standard replacement cost, extended replacement cost, and guaranteed replacement cost, each with varying payout structures [10][16] - Modified replacement cost policies may be offered for older homes, using modern materials for repairs instead of replacing with original materials [8] Claims Process - The claims process for RCV involves an initial payment based on ACV, followed by a second payment for recoverable depreciation after repairs are completed [11][12] - Insurers may have different policies regarding recoverable depreciation and deadlines for submitting receipts [13] Financial Considerations - RCV coverage generally offers more financial protection but comes with higher premiums compared to ACV coverage [14][19] - It is advisable to consider extended and guaranteed replacement coverage endorsements for better protection against rising rebuilding costs [16][17]