The last thing anyone wants to worry about after a traumatic life event is the detail in the fine print. Doing so, however, can save thousands of dollars if you need to make a claim against your home insurance policy, especially if you make a claim to recover depreciation. Depreciation is an accounting convention which accounts for the wear and tear on an item. Accounting for depreciation lowers the value of the asset. Recoverable depreciation is insurance against depreciation.
Understand recoverable depreciation. According to an article on Bankrate.com, entitled "No depreciation in home's insurance? Look again," depreciation is "...the difference between the cost required to actually repair or replace something and its value before it was destroyed." As not all home insurance policies provide for replacement value, depreciation can only be "recovered" once the claim is made against the property. In general, this is not a claim that can be made on an actual cash value (ACV) policy, however, be sure to look over your insurance policy to confirm. If needed, have a general or contract attorney look over the claim for you.
Review your insurance policy. Look for a clause called "Recoverable Depreciation," or referring to "Depreciation." The contract language might also look like "Guaranteed replacement cost coverage." Specifically, you want to know if 1) you have the option, and 2) what you need to submit in order to make a claim.
Gather the appropriate documents for your argument. A claim is a lot like an argument. You will need to provide proof of repairs, that is, with receipts, canceled checks, pictures (before and after), and any other document that helps the adjuster confirm the price of the house. The pictures will most likely have to be sent to the insurance adjuster by the contractor who makes the repairs. For this reason, it may take a while for the claim to be approved, since it cannot be approved until after the repairs have been completed at your expense.
Contact your insurance agency. Most insurance agencies have a 24-hour claims hotline. An insurance adjuster will then mail the estimation of breakdown of damages to you, the claimant.
Wait for the claim check. The amount of the check will be the "value of the asset" + "depreciation" - "any deductible." Checks over $5,000 may go to both you and the mortgage company. If this is the case, you must endorse the check over to the bank and they will cash the check for you.