The difference
Both kinds start the same way: the carrier subtracts depreciation from replacement cost to reach actual cash value and pays the actual cash value first. What happens to the withheld depreciation is where they split.
- Recoverable depreciation is released to you after you complete the repair and submit invoices. This is the replacement cost holdback.
- Non-recoverable depreciation is never released. It applies under an actual cash value policy or endorsement (a roof payment schedule, for example) or to items the policy settles on an actual cash value basis.
How it plays out in Florida
Fla. Stat. 627.7011 sets how a replacement cost loss is paid: actual cash value first, with the held-back depreciation released as repairs are completed, and no holdback on a total loss. So on a genuine replacement cost policy the depreciation is recoverable, but only if you actually do the repairs and document them. Many Florida homeowners take the first actual cash value check, never repair or never submit invoices, and leave the recoverable depreciation with the carrier.
Watch the endorsements
A roof payment schedule or an actual cash value roof endorsement can turn what looks like recoverable depreciation into non-recoverable depreciation for the roof. Read the declarations page and the endorsements before assuming the holdback is coming back.