Where can I find information concerning whether labor can be depreciated for property insurance losses?

Question

I need this information state by state.

Answer 1

do you want to know what the insurance policy will cover for the labor to replace or repair to damaged property?

Answer 2

Labor can't be depreciated - because you don't insure "labor" with property.  Cost to rebuild, is always cost to rebuild with labor and materials, at the date of the loss.

There isn't any website that says that.

Answer 3

You're not going to find a website like that. Your best bet is to call your state's Insurance Commission if you need confirmation on something specific you've received.

If an item is being replaced in a property claim, both the part (let's say a furnace) and the labor to install it are depreciated based on age/condition. If something is just being repaired (let's say rewiring the furnace, instead of replacing it, as long as it's not a wear/tear part) they usually don't depreciate.

If an insurance company is taking Recoverable Depreciation, (also called 'holdback')  you can get that amount back when you repair the property and show invoices that the money was spent fully. This is subject to your own policy and the coverage you have purchased.

If it's a 3rd party property claim or Nonrecoverable Depreciation per the terms of your policy, the same calculations apply:  Total cost of replaced items (parts + labor) - depreciation % of replaced items = net Actual Cash Value claim. The holdback in this instance would not be recoverable.

Good luck.

Answer 4

I never heard of depreciating anything but property (be it real or personal).  Do you mean including labor cost on an insurance claim?