A benefit of an RCV (Replacement Cost Value) insurance policy is the loss settlement provision. Your property losses are covered for the amount it actually costs to repair or replace your property. There is no loss of money due to depreciation.
In some situations, usually when the total claim is over a certain dollar amount, a percentage of the total allowed (depreciation amount) will be held back until the repair or replacement has been completed. When the work is finished, you can recover the depreciated amount as long as the total collected is the lesser of the amount required to do the work or the actual amount you spent, minus the deductible and any funds already paid to you.
If you are unsure of your total depreciation amount available, you should contact your insurance adjuster or insurance agent.
If your cost to repair or replace your property is greater than the amount estimated by your insurance company, you should contact them in advance of starting work because they will usually not be liable for any repairs outside, or greater than, their original estimate. Any additional expenses should be approved in advance.
If you have an ACV (Actual Cash Value) insurance policy, according to the loss settlement provision, you may not be able to recover depreciation. As always, check with your insurance company, insurance agent, or insurance adjuster for further clarification on ACV payment terms.
You may be under a time-restraint for recovering your depreciation. Every insurance company is a little different in how much time they allow you to file for your recoverable depreciation. You may have a date printed on your insurance claim estimate from your adjuster.