Depreciation

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PostPosted: Fri Sep 18, 2009 9:47 pm   Post subject: Depreciation  

My question is two-fold...



1. Does depreciation apply to material and labor or just material only? (eg. siding, roofing, etc)



2. What is the maximum appropriate depreciation as long as the item is till in usable condition?


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PostPosted: Sat Sep 19, 2009 3:32 am   Post subject:   

My opinion and how I used to write estimates is that it should only apply to materials. Some carries want it on both materials and labor. I never included it on tear out or demo.



The maximum really depends on the material being replaced and the carriers guidelines. I never went over 50%, and in those cases it was normally 25 year composition shingles that were 30+ years old. Lazy adjusters usually take a flat 20-25% across the board.



I tried to cut people with an ACV policy some additional slack, knowing they weren't getting the RCV difference.



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PostPosted: Mon Sep 21, 2009 6:28 pm   Post subject:   

Thanks, that's what I've done for years and just recently had a company question how depreciation was calculated. I depreciated each line item individually with a maximum of 50% on materials only. Just double-checking to see if I was right. THANKS! I'm new to this website and have it bookmarked!


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PostPosted: Tue Sep 22, 2009 4:14 am   Post subject:   

Those were just my guidelines, unless a company told me to write an estimate in another fashion. I guess the arguement on placing it on both labor and materials is that you can't have new drywall without it being installed. Unless you want it sitting in your living room unhung let alone unfinished.



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PostPosted: Tue Sep 22, 2009 6:33 am   Post subject:   

Dasfuk, it seems you had the authority to cut the additional slack for people unlike many other adjusters.



Does it mean that people generally don't get this RCV difference?



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PostPosted: Wed Sep 23, 2009 3:05 am   Post subject:   

Quote:
Does it mean that people generally don't get this RCV difference?





If they only have an ACV policy, then no they wouldn't get the holdback amount.



And I didn't have the authority, I just tried to give people the benefit of the doubt on an ACV policy...and if they carrier approved the payment then all was good.


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PostPosted: Wed Sep 23, 2009 6:00 am   Post subject:   

So, there were instances wherein the carrier would even deny the payment. On what basis would the carrier decide whether to offer this benefit of doubt?

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PostPosted: Thu Sep 24, 2009 4:33 am   Post subject:   

I was an independent adjuster. I made recommendations to the carrier based on my inspection. It was up to the carrier to decide if they agreed with me. Most of the time they did, some didn't. So no and yes, they didn't deny payment they may just not have agreed with my findings, estimate or recommendations.



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