How depreciation is calculated here
For each row, depreciation equals the item’s age divided by its expected life, multiplied by its replacement cost, capped at the percentage you choose. Actual cash value is replacement cost minus that depreciation. This straight-line approach is common, but carriers may use other schedules, so compare the result with the depreciation column in your estimate.
The two payments
- First payment: total ACV minus your deductible.
- Holdback: recoverable depreciation, usually released after you complete repairs and send proof within the time the policy allows.
- Total: replacement cost minus the deductible, if every dollar of holdback is recovered.
Where disputes start
Excessive depreciation on labor, on items with long useful lives, or on materials that were nearly new is a frequent source of underpayment. If the depreciation share looks high, an estimate audit can check it line by line. Figures are illustrative.
Questions about this tool
Does depreciation apply to labor?
Policy wording and carrier practice vary. Some estimates depreciate materials only; others depreciate labor too. Check how your estimate treats it.
When must I claim the holdback?
Many policies set a deadline to complete repairs and request recoverable depreciation. Read the loss settlement section and put the date on your calendar.
What if my policy is actual cash value only?
Tick the ACV-only box. The holdback won’t be recoverable, so the first payment is the full settlement for that coverage.