Our home was destroyed in a tornado. The insurance company estimated the claim to be 207,000 and totaled our home. They issued us checks for the damage minus the 15,000.00 in depreciation. We bought a foreclosed home for 195,000. Now they tell us they dont owe us the depreciation amount. We were told all along we would be issued that money when we either replaced or rebuilt. We had planed on using that part of the settlement to make repairs to the home. Are we entitled to the depreciation funds?Thank you for your time
Country relating to Question: United States
State (if USA): Alabama
talked to claim representative handling our claim.
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Good evening. It depends upon your specific policy. This happens a lot and it's because homeowners are not careful about reviewing their policies. It likely that given the insurance company's position that your replacement coverage is only on the improvements, but not your personal property. If you have replacement coverage on both your improvements and personal property, the insurance company cannot deduct depreciation on either; but If your policy covers only the improvements for replacement coverage and your personal property (your home's contents) for its actual cash value, the insurance company is entitled to deduct depreciation from your personal property's overall value before arriving at a figure. I'm sorry!
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Ok thank you. Would repairs made not be considered part of the replacement process. Again thank you.
Yes, repairs would be part of the improvements; not personal property. They would not be able to take the depreciation on any improvements.
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