What is the term for depreciation that is disbursed after proof of repairs has been provided?

The term for depreciation that is paid out after the insured party provides proof of repairs is known as recoverable depreciation. This concept is significant in insurance claims, particularly in property insurance, where the policyholder first receives a partial payment that accounts for the actual cash value of the damaged property, factoring in depreciation. Once the insured completes the repairs and can show verification, the insurer will then release the remaining funds, referred to as recoverable depreciation.

This mechanism encourages policyholders to restore their property and ensures that insurance payments align with actual losses rather than encouraging neglect of property upkeep. Understanding recoverable depreciation is crucial for public adjusters, as it helps them guide clients through the claims process and maximize the benefits they receive after a loss.