what does the depreciation amount mean on the estimate I received to repair my roof?
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UPDATED: Jan 12, 2018
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Insurance Question from Marietta, GA
Asked on 01/12/2018
what does the depreciation amount mean on the estimate I received to repair my roof? I had damage from limbs falling and now need a new roof. On the estimate i received from the adjuster, it has the amount to repair roof , then it has a depreciation amount. I do not understand what this is. I know what depreciation is I just dont understand what role it plays here.
Answer given on January 14, 2018
Homeowner insurance usually pay replacement cost for damage to a home. However, for some items, such as the roof, there can be depreciation taken when settling the claim.
Depreciation is based on the replacement cost of the roof, less the age of the roof. If the life expectancy of the roof is 20 years, and roof is 10 years old, the insurance company can depreciate the claim by 50% due to the age. Therefore you would only get 50% of the cost to repair or replace your roof. Your deductible would also apply to the amount you would receive for the roof.
You can try to negotiate the amount depreciated with the adjuster. If they will not negotiate, ask for a supervisor. You may be able to get more money since the damage caused by the tree limbs had no effect due to the age of the roof.
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