Depreciation Deadlines Across Insurance Companies: Avoid the Loss of Funds Owed

Understanding Depreciation and Its Impact on Your Claim

When disaster hits, understanding your homeowner’s insurance policy’s particulars becomes a priority. One often overlooked aspect is depreciation. Insurance policies vary greatly, so always check with your agent or adjuster to explain the specifics of depreciation for your policy. But, it can help to grasp what depreciation is, generally speaking.

What is a simple definition of Depreciation?
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Depreciation means that over time, the value of fixed assets goes down. This happens because assets lose value as time passes and they become outdated. Depreciation keeps happening until the assets are no longer in use.

What is the importance of Depreciation?

With Replacement Cost Value insurance policies, the recoverable depreciation amount allows homeowners to replace damaged or destroyed items or materials with the same quality, at their current prices, without a reduction for depreciation. 

Depreciation Deadlines

Many carriers will pay the actual cash value of the claim upfront in order for work to begin, and then hold back the remaining recoverable depreciation amount, until the work is completed.  However, it is important to know that home insurance policies have deadlines for claim filing and completing repairs in order for the recoverable depreciation payment to be released. The deadlines vary greatly depending on the homeowner’s policy and insurance. Some companies may make deadline extensions under special circumstances, but some will not. It helps to have an overview of what the different insurance companies generally will do. 

Stay Informed!  To better help our general contractors and roofers, the Claim Supplement Pro team conducted research in April 2024, to gather the information shared here.  We'll keep our database continually updated, as well as our blog, for any important changes that we find over time.  With this current data, the insurance carriers that we spoke with confirmed their common depreciation timeframe and the requirements they need before releasing depreciation.   

Please take note that the information presented here is general, and may not apply specifically to your customer's policy.  Always review what is stated in a policy.  It can even vary within the same insurance company, so always check the policy or directly with the claim adjuster to be certain when a deadline date is set. 

The table below provides a breakdown of depreciation deadlines for some insurances that cater to homeowners in Illinois.

INSURANCE	Depreciation Deadline	​​Requirements for Release of Depreciation
​State Farm	2 years after the date of loss	Finalized Supplement Finished Production Submit Final Invoice
​Allstate	180 days from the date the actual cash value payment was issued	Finish production Finalize Supplements Submit Final Invoice/ Complete of Completion
​Farmers	​1 year from the date the actual cash value payment was issued	Finish production Finalize Supplements Submit Final Invoice
​Country Financial	​1 year from the date of loss	​Finish production Finalize Supplements Submit Final Invoice
Liberty Mutual	​1 year from the date of loss but insurance has to be notified within 180 days after the actual cash value was issued to make further claims.	Finalized Supplement Finished Production Submit Final Invoice with Photos of Completion
American Family	1 year from the date of loss	Finished Production Submit Final Invoice
Travelers	2 years from the date of loss but insurance has to be notified within 180 days after the date of loss to make further claims	Finalized Supplement Finished Production Submit Final Invoice with Photos of Completion
​USAA	1 year from the date the actual cash value payment was issued or 18 months from the date the actual cash value payment was issued	Finish Production Finalize Supplement Submit Invoices Submit Final Invoice
​SAFECO	​1 year from the date of loss but insurance has to be notified within 180 days after the actual cash value was issued to make further claims.	Finalized Supplement Finished Production Submit Final Invoices
​Auto-Owners	2 years from the date of loss but  insurance has to be notified within 180 days for supplements and/ or additional repairs	Finish Production Finalize Supplement Submit Final Invoices with Photos of Completion

In conclusion, depreciation timeframe differs from one insurance to another, thus paying close attention is necessary. If depreciation deadlines are missed, a large amount of money could be lost that should go towards paying for repairs. When that happens, it unfortunately leaves homeowners and contractors in a very difficult situation of figuring out how the repairs will be fully paid for.   With the information above, it is still essential for contractors to actively communicate with their insured customers and the insurance adjusters. Keep detailed documentation of everything, especially communications, and act promptly.

Claim Supplement Pro: Your Partner in the Process

Dealing with these deadlines and requirements can be laborious. Also, in our experience, many folks just simply overlook impending deadlines or do not know about the consequences of missing them. Claim Supplement Pro can help! Our goal is to provide solutions for streamlining your supplement process, including informing our partners about impending deadlines so that no funds owed on a claim get lost.

Let's Discuss!

• Which insurance companies do you frequently work with the most?
• What are your biggest hurdles in working with depreciation deadlines?
• If you'd like to see the depreciation deadlines for other insurance companies, please leave us a comment specifying which insurance companies you would like to see!

Share your experiences in the comments below!  Please bookmark this awesome resource, and share with your team or anyone that might be interested. 

Stay Tuned! We have much more to cover on this topic, including an upcoming post about how to request an extension on a depreciation deadline.

We hope you find Claim Supplement Pro blog posts like this helpful for you to be more informed about dealing with insurance claims.   To take things to the next level and deliver top-notch service to your customers, contact us today to find out how we can help your storm restoration business grow.