depreciation and labour charges George Addae asked 2 years ago
depreciation and labour charges

When applying depreciation, is an insurer right to add the cost of labour to the cost of materials required to repair a damaged old building, whilst computing the depreciation?

1 Answers
Denise Sze Denise Sze Expert answered 2 years ago

George, it’s a great question. Depreciation does not apply to labor. Additionally not all materials should have depreciation applied. Generally speaking, the items that depreciate are those which need regular maintenance such as paint, exterior roofing, flooring, etc. When a carrier applies depreciation, it should be on the depreciating material only.

If you feel depreciation has been applied to your claim inaccurately, you can file a complaint with the CA Department of Insurance.