The two-check system
Replacement cost value (RCV) is what it costs to repair or replace with like kind and quality today. Actual cash value (ACV) is RCV minus depreciation. Many policies pay ACV minus the deductible first, then pay the withheld depreciation once you complete repairs within the policy’s time limit.
How depreciation is estimated here
The tool uses straight-line depreciation: age divided by expected life, applied to the replacement cost and capped at the percentage you choose. Real estimates may use different life tables, condition adjustments or non-depreciable items such as labor in some cases. Use the result to understand the carrier’s math, not to replace it.
What to check on your own estimate
- Is depreciation applied to labor, and does your policy allow it?
- Are the ages and life expectancies reasonable for your materials?
- Is the depreciation marked recoverable or non-recoverable?
- How many days do you have to complete repairs and claim the holdback?
Questions about this worksheet
What is recoverable depreciation?
It’s the depreciation withheld from your first payment that you can collect after completing repairs, if your policy pays replacement cost.
Why does the tool cap depreciation?
Estimates rarely depreciate items to zero. Many cap at a percentage. Choose the cap that matches your estimate.
What if my policy is ACV only?
Tick the box. The tool will show that no holdback is recoverable and the total equals ACV minus the deductible.
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