What Is Recoverable Depreciation?
Recoverable depreciation (also called RCV holdback or withheld depreciation) is the difference between a roof's replacement cost value (RCV) and its actual cash value (ACV). The carrier pays ACV upfront and typically releases the depreciation holdback once completion is documented and requested — subject to policy deadlines, and in Texas the insurer may require proof that the deductible was paid. Not all policies have recoverable depreciation — some are ACV-only policies.
Important Distinction
Note: Recoverable depreciation is withheld, not forfeited — but it is not automatic either: carriers generally release it only after completed work is documented, and a policy written on an actual-cash-value basis may not provide for recovering it at all. The policy language, not the name on the check, answers whether it comes back — and Zilker Roofing does not interpret that policy language or control the carrier’s release: we provide the completion documentation, the carrier decides.
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Also Known As
These are the search terms and phrases that commonly refer to this topic, so you can find it however you describe it.
How Recoverable Depreciation Relates to Other Topics
Recoverable depreciation is a key component of the insurance claim settlement — the carrier withholds it initially and releases it after the work is documented. Understanding depreciation is essential to knowing what you will actually receive from your claim.
Recoverable depreciation is the held-back portion of a claim, released after the insurance restoration work is completed and invoiced.
Related To Recoverable Depreciation
A deductible is the homeowner's required out-of-pocket payment. Recoverable depreciation is withheld carrier funds that may be released after work completion. These are separate amounts.
Recoverable depreciation is the held-back portion of a replacement claim, released by the carrier after the completed work is documented.
Recoverable depreciation is paid after the work is completed and documented, which creates a cash-flow gap in the middle of the project - the gap short-term roof financing most often exists to bridge.
Recoverable depreciation determines when the withheld portion of a covered replacement cost is released after completed work is documented.
When a hail loss scopes to replacement on a replacement-cost policy, part of the payment is typically withheld as recoverable depreciation and released only after the completed work is documented.
TDI describes replacement-cost roof claims paying in two checks with a partial payment first, which is the mechanism recoverable depreciation names once the work is completed.
The depreciation column separates recoverable from non-recoverable amounts, a distinction the policy language rather than the estimate determines.
Questions about Recoverable Depreciation?
Zilker Roofing inspects before recommending. Honest assessment, no pressure.