What is non-recoverable depreciation?
Depreciation the carrier subtracts and never pays back — the part of a claim a policy keeps even after the roof is replaced.
Non-recoverable depreciation is the portion of a claim the insurance company holds back and never releases, no matter what. Unlike recoverable depreciation, finishing the work and sending the paperwork won’t earn it back — it’s simply money the policy doesn’t pay.
It usually shows up on actual-cash-value policies, or on specific items the carrier has decided to depreciate permanently. On the loss summary it can look a lot like recoverable depreciation, so it’s easy to assume a second check is coming when it isn’t.
Knowing which depreciation is recoverable and which isn’t tells you the real ceiling on a claim. It also keeps you straight with the homeowner about what insurance will actually pay versus what they’ll owe out of pocket.