Depreciation and Holdback on Hurricane Claims
Your first check is often far less than the insurer’s own estimate. Most of the gap is depreciation, and on a replacement-cost policy, much of it can be recovered.
How it works
| Term | What it means |
|---|---|
| Replacement cost value (RCV) | What it costs to repair or replace with new materials |
| Depreciation | The insurer’s deduction for age and wear |
| Actual cash value (ACV) | RCV minus depreciation: usually your first payment, minus the deductible |
| Recoverable depreciation | The held-back depreciation, paid after repairs are done |
Example: the insurer’s estimate is $40,000 RCV and it depreciates $12,000. With a $6,000 hurricane deductible, the first check is $22,000. The remaining $12,000 is paid once you show the work is done.
Where insurers go wrong
- Over-depreciating: taking 40% or 50% off a roof with years of life left
- Never paying it back: losing receipts or ignoring requests for the holdback
- Short deadlines: policies may require you to repair and claim depreciation within a set time; ask for an extension in writing if repairs are delayed
A new rule since 2025
Since August 1, 2025 (Act 500 of 2025), an insurer on a replacement-cost policy may hold back recoverable depreciation until you give reasonable proof that you paid your deductible. A signed installment or financing agreement with your contractor counts. Keep proof of every payment.
How to get your depreciation paid
- Ask the insurer for its estimate showing depreciation line by line.
- Challenge unreasonable percentages, especially on newer roofs.
- Keep contracts, invoices, canceled checks and photos of the finished work.
- Send a written request for the holdback with your proof, and keep a copy.
Depreciation not paid? 504-834-4000. Back to Louisiana Hurricane Insurance Claims