How Does My Depreciation Work?
Your insurance company may also hold back depreciation. Depreciation is the amount of your settlement that is not paid unless and/or until you need it to finish fixing your home.
Most policies cover full replacement cost minus your deductible. If you’re not sure, ask your roofing contractor or insurance adjuster.
The depreciation check is usually only released after you or your contractor submits a final invoice.
If you do not use all of your depreciation to get your home fixed, your insurance company will subtract your deductible from the final lower-priced invoice rather than the total claim originally allowed.
In other words, your insurance company will keep any depreciation monies you didn’t spend while getting your home fixed.
After the final invoice is submitted, your insurance company and sometimes your mortgage company, may want to do a final inspection to be sure that all of the work billed has been completed in a workmanship like manner with quality materials before releasing the depreciation check.