Depreciation is applied in an insurance settlement based on the age and condition of the replaced items at the time of the loss and will be noted in the estimate. This is called an Actual Cash Value settlement. This is detailed in the Conditions section of the policy under Loss Settlement.
If your policy provides replacement cost coverage, you are eligible to receive some or all of the recoverable depreciation, provided that your actual costs for replacement meet or exceed the Actual Cash Value payment.
In California, you have 12 months from the date that the first payment toward the Actual Cash Value is made to collect the full replacement cost. In other states, you have 180 days from the date of loss.
To make a claim on recoverable depreciation, you would inform us of your intent to claim the recoverable depreciation, have the damaged item(s) replaced no less than 12 months from the date of first payments for your claim, and submit the final repair bill/invoice, contract, or replacement receipt showing the items(s) have been replaced.