Glossary

Non-recoverable depreciation

The age-and-wear deduction an insurer takes from a claim payment and never pays back, because the policy settles at depreciated value or repairs are not made.

Also called: permanent depreciation, unrecoverable depreciation

Non-recoverable depreciation is depreciation that comes off your payment and stays off. It is the permanent counterpart of the holdback described under recoverable depreciation.

It shows up in a few situations. The policy may pay actual cash value on that item from the start, as many policies do for personal property without a replacement cost endorsement, or for a roof under an ACV roof endorsement or payment schedule. You may decide not to repair or replace, so the holdback is never earned. You may miss the deadline to claim it. And items that replacement cost settlement usually excludes, such as antiques, articles in poor condition or outdated items in storage, stay depreciated.

Here is a hypothetical case. A 14-year-old roof with an assumed 20-year life costs $15,000 to replace, and the policy carries an ACV roof endorsement. Depreciation is 70%, or $10,500, so the policy pays $4,500 less your deductible. Finishing the roof does not trigger a second check.

Before a claim, ask which parts of your policy settle at ACV. Our guide to roof payment schedules and ACV roofs covers the most common surprise.

Last reviewed October 10, 2026

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Related terms

Depreciation The loss in an item's value from age, wear and obsolescence, which an adjuster subtracts when pricing what a claim should pay. Recoverable depreciation The part of a replacement cost payment an insurer withholds at first and releases after you finish the repair or replacement and send proof of the cost. Actual cash value What an insurer pays for damaged property: the cost to repair or replace it today, minus a deduction for age and wear, so less than a new-for-old payment. ACV roof endorsement An endorsement that pays wind and hail roof damage at replacement cost less depreciation, even when the rest of the home is settled at full replacement cost. Replacement cost What it would cost to repair or rebuild with materials of like kind and quality at today's prices, with no deduction for age or wear.

Related guides

Claim checks, holdbacks and when the money arrives Why a home claim pays in stages: depreciation holdbacks, mortgage-endorsed checks, what the ISO form says about timing, and how to plan cash for repairs. Recoverable depreciation: getting the rest of your claim Insurers hold back depreciation until repairs are done. How to collect it, the time limits that apply, and which depreciation never comes back. Replacement cost vs actual cash value: why it matters Replacement cost pays to repair or rebuild at today's prices; actual cash value subtracts depreciation first. How each settles your house, roof and belongings. Roof payment schedules and ACV roof endorsements ACV roof endorsements and payment schedules cut what a wind or hail roof claim pays as the roof ages, for a lower premium. How each works and what to compare.

Related tools

Depreciation calculator: actual cash value vs replacement cost Estimate what belongings are worth after depreciation, what an actual cash value check would be, and how much a replacement cost policy pays back later.