I got an amount back from Ameriprise home insurance for hail damage to my roof. They gave the following amounts


Estimated cost = $8229
depreciation = $1321
=================
subtotal = $6908
minus deduct. = $1000
=================
amount mailed=$5908


The insurance rep. said I would receive the "depreciation" amount after I send in the roofing company's estimate and depending if the difference is smaller than their depreciation amount I would get the smaller amount, or if it was over the depreciation amount they would review what the cost difference is.

My question is this a "normal" process in most insurance companies to withhold the "depreciation" amount from the total cost of the estimate on the claim?


Thanks,

Paul

It depends upon how the policy is written. If you have replacement cost or value insurance (which costs more) then depreciation is not taken. They pay what ever it costs to replace the roof except for the deductable.

Yep Paul, HVAC is right, got to read that policy. If you aren't sure what is says ask your agent to explain. My policy replaces the roof 100% but I'll bet my premium is higher than most.

The reason they kept the depreciation is because your policy is an ACV (Actual Cash Value) policy. If they are going to reimburse you for the depreciation that is actually a pretty good policy. The reason that they process claims this way is so that you are forced to get it fixed if you want to collect. Meaning, you can't collect the value for the whole roof and only replace 1/2.

Many ACV policies will not even pay the depreciation so the fact that you are getting it paid means that your premium is probably lower than a strictly ACV policy with no depreciation recovery but lower than a policy that includes CR (Cost of Replacement) policy.

Overall a pretty good middle of the road policy. Now that you are thinking about your insurance though it would not be a bad idea to do a good overall look and make sure you are covered in all of the areas that you should be and aren't paying for things that you don't need.

Hope this helps,

Aaron