Understanding Recoverable Depreciation on Your Hail Claim

If you’ve filed a hail claim recently, you may have looked at your first settlement check and thought, “That’s way too low!” You’re not alone—this is one of the most common points of confusion in property claims. The good news? In most cases, you’re not actually losing money. What you’re seeing is recoverable depreciation at work.

What Is Recoverable Depreciation?

When an insurance company pays out on a property claim, they don’t usually give you the full replacement cost up front. Instead, they pay in two parts:

Actual Cash Value (ACV):

This is the first check you receive. It’s the replacement cost minus depreciation (the age and wear of your roof, siding, or other property).

Recoverable Depreciation:

This is the withheld amount that you can recover once the work is completed and proof (like invoices or completion photos) is submitted.

When you add ACV + Recoverable Depreciation, you get the full replacement cost your policy promises.

Example

Let’s say your roof costs $20,000 to replace.

Replacement Cost: $20,000

Depreciation: –$6,000

Deductible: –$2,500

First check (ACV): $11,500

Once the work is done and the bill is turned in, the insurance company sends the withheld $6,000 depreciation back to you.

Total payout: $17,500 (your deductible is your responsibility).

Why They Do It

Insurance companies use this process to make sure the repairs actually get completed. Without it, some people would just cash the first check and leave the damage unrepaired. Recoverable depreciation ensures the funds go toward restoring your property.

Key Takeaways

The first check you get is not the final settlement.

Recoverable depreciation is released after the work is done.

Your deductible is the only part you’re truly out of pocket for.

If you’re unsure about your settlement paperwork, bring it to us—we’ll walk you through it line by line.

✅ Bottom line: Don’t panic when you see a low first check. You’re likely still getting the full replacement cost—just in two stages.