Why carriers do this
It prevents a homeowner from being paid full RCV and then not repairing: leaving the home in a more hazardous state and potentially creating future-claim issues.
How to release the holdback
- Complete the documented scope of repairs
- Gather final invoices from contractors
- Submit the invoices and certificate of completion to the carrier
- Carrier issues the supplemental payment for the holdback amount
Time limits
Most policies give you a window (commonly 180 days to 2 years) to complete repairs and claim the holdback. Miss it and the carrier may retain the depreciation permanently.
When holdback is disputed
- Carrier claims scope was inflated and won't release full holdback
- Contractor final is higher than the Xactimate estimate
- Insured repaired at lower cost: does the insured keep the difference?