Services
Insurance
Loans
Repairs
Advice
About

What is recoverable depreciation on home insurance?

I’m about to sign my homeowners insurance contract but I just noticed an odd term: “recoverable depreciation.” It seems like that will impact the amount of money I’d get when I file a claim. I want to make sure I understand everything before signing on. So, what is recoverable depreciation on home insurance?

avatar
Bellina Gaskey · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
You’re right that recoverable depreciation on home insurance is related to how you receive payouts. Here’s how it works.
Home insurance policies
usually cover either the replacement cost of your items or their actual cash value (ACV). Say you have a TV you bought for $500. Replacement cost is the money you’d need to buy a new comparable TV ($500), while ACV is the current value of your TV affected by depreciation—say, $300.
Recoverable depreciation is the difference between the two values: in this case, $200.
If you have a replacement cost policy, your insurer may choose to handle your claim payouts in two separate checks, with the first covering the ACV and the second covering the recoverable depreciation (hence, recoverable).
Returning to the TV example, the insurer may give you an initial $300 (the ACV), wait for you to purchase a new TV, then give you the other $200 after you provide a receipt or proof of purchase.
Have other questions about home or
car
insurance? Licensed broker
Jerry
has all the answers—and all the savings. Compare quotes with Jerry and you could save hundreds of dollars on insurance payments each year.
View full answer 
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.

Join 4M+ members in lowering their car insurance

Easiest way to compare and buy car insurance

√
No long forms
√
No spam or unwanted phone calls
√
Quotes from top insurance companies
Find insurance savings