What is recoverable depreciation?

My shed was destroyed in hurricane, can I get my "recoverable depreciation" if I upgrade my shed?

• insurance sent me a check for about $1500 with "recoverable depreciation" of about $5000. So the total replacement cost was about $6500 for my 13x10 shed. I can get a much bigger shed for less than $6500, how would that work? Also, would they list an amount for recoverable depreciation if it wasnt actually recoverable for some reason?

• Answer:

  Yes, you can. As long as you build AT LEAST the same quality as before, like materials, etc, you'd still get your recoverable depreciation up to the actual cost to replace. But you won't get overage. When you have replacement cost coverage on your policy, and there's damage to the building, they don't PAY you replacement cost, until you actually replace. They pay you actual cash value, and the "recoverable depreciation" is the difference between their estimate of how much it will cost to repair/replace the shed, vs, how much it was worth at the time of loss due to depreciation and wear and tear. So yes, on a replacement cost policy, they MUST tell you what the recoverable depreciation is, when they pay actual cash value. They are legally obligated to tell you that they didn't pay the full amount out, but will, when the conditions are met (ie, when you rebuild).