How depreciation should work
- Useful life of the specific item
- Effective age considering condition
- Straight-line or weighted curve depending on item
- Typically applied by category (roofing 20-25 yrs, HVAC 15-20, contents varies)
Inflation patterns
- Excessive age assumptions: depreciating a 5-year-old roof as if it's 15
- Condition ignored: well-maintained items depreciated same as neglected
- Labor depreciated: labor isn't recoverable typically; some carriers depreciate it anyway
- Total depreciation without limit: useful-life exceeded but item still functional
How to push back
- Document actual age of each item
- Photograph pre-loss condition where possible
- Challenge labor depreciation (Florida case law supports)
- Cite manufacturer warranty periods as useful-life floor
- Submit age-verification documents (receipts, warranty, service records)
RCV holdback
On RCV policies:
- Carrier pays ACV initially
- Depreciation held back
- Released when repairs completed and receipts submitted
Many carriers let the RCV holdback sit unreleased because the policyholder doesn't know to request it.