what's recoverable depreciation
The full replacement cost of the roof is $10,000. The insurance adjuster âdepreciatedâ the roof 50% â an arbitrary number â based on its age, so the Actual Cash Value of the roof is now $5,000. The recoverable depreciation also happens to be $5,000 ($10,000 replacement value less $5,000 Actual Cash Value). The policy ownerâs deductible is $1,000. The insurance company will initially make a payment to the policy owner for $4,000.