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Recoverable depreciation refers to the portion of depreciation on property that can be recouped in an insurance claim under certain conditions. This typically applies to replacement cost policies, where the insured is allowed to receive the full replacement cost of an item, minus any depreciation that may be applied to that item over time.

In many insurance policies, particularly those covering personal property or dwellings, claims are often settled based on the replacement cost of the item rather than its actual cash value. However, the payout may be subject to the condition that the replaced item is actually bought or repaired, allowing the insured to recover the depreciation that was initially deducted from the total loss payout.

This condition emphasizes that recoverable depreciation is contingent upon the insured fulfilling certain obligations, such as replacing the depreciated item. Therefore, understanding the concept of recoverable depreciation and its implications is crucial for both claimants and claims adjusters, who must navigate the terms of the policy accurately to determine the appropriate payout.