How depreciation works on a claim
Replacement cost value (RCV) is what it costs to repair or replace the damaged item new. Actual cash value (ACV) is RCV minus depreciation for age and condition. Many policies pay ACV first and release the depreciation, often called holdback or recoverable depreciation, after the repair is completed.
Using the worksheet
- Enter each item's replacement cost, its age and its expected life.
- Choose the maximum depreciation your estimate applies.
- Enter your deductible.
- Check the ACV-only box if your policy does not pay recoverable depreciation.
Alaska timing
Policies usually set a deadline to complete repairs and claim the holdback. In Alaska, short building seasons, barge schedules and contractor backlogs after big storms can make those deadlines tight. If you are running short on time, ask the carrier in writing about an extension before the deadline passes.
Questions about this tool
Is depreciation applied to labor?
Practices vary by carrier and policy, and the question has been litigated in some states. Ask how labor depreciation is handled on your estimate.
Why is my depreciation so high?
Age, expected life and the maximum depreciation cap drive the number. Small changes in assumed life can make a large difference.