What Is Depreciation in Roof Claims?

What Is Depreciation?

In insurance terms, depreciation is the reduction in value of your roof due to age, wear, and use. It represents the difference between what your roof would cost to replace new and what it's currently "worth" given its condition.

How Depreciation Is Calculated

Insurance companies typically use this formula:

Depreciation = (Roof Age / Expected Lifespan) × Replacement Cost

Example:

• 3-tab asphalt shingles
• Expected lifespan: 20 years
• Current age: 8 years
• Replacement cost: $12,000
• Depreciation: (8/20) × $12,000 = $4,800

Factors That Affect Depreciation

• Roof Material

- Asphalt shingles: 20-30 year lifespan

- Metal roofing: 40-70 year lifespan

- Tile roofing: 50+ year lifespan

• Installation Quality

- Proper installation = longer expected lifespan

- Poor installation = accelerated depreciation

• Climate and Conditions

- Harsh climates may accelerate depreciation

- Well-maintained roofs may depreciate slower

Recoverable vs Non-Recoverable Depreciation

Recoverable Depreciation

With RCV (Replacement Cost Value) policies:

• Initial payment = ACV (replacement cost minus depreciation)
• After repairs, you can claim the withheld depreciation
• Must complete repairs within policy timeframe

Non-Recoverable Depreciation

With ACV (Actual Cash Value) policies:

• Depreciation is permanently deducted
• Cannot recover it after repairs
• Final payout = ACV only

Tips for Maximizing Your Claim

• Keep maintenance records - Shows good care
• Know your policy type - RCV vs ACV matters
• Complete repairs promptly - Recover depreciation on RCV policies
• Document roof condition - Before and after damage

Key Takeaways

• Depreciation reduces claim payouts based on roof age
• RCV policies allow recovering depreciation after repairs
• ACV policies do not
• Understanding depreciation helps set realistic payout expectations