January 5, 2026
Fire Damage Depreciation: Why Insurers Underpay and How a Fire Insurance Attorney Can Fix It
When fire damage occurs, the emotional impact is overwhelming—but the financial toll can be just as painful if your insurer uses depreciation to reduce your payout.
What Is Depreciation in Fire Insurance Claims?
Many homeowners don’t realize their insurance company deducts depreciation—even if the policy promises replacement cost coverage. Instead of paying the amount it would cost to rebuild or replace with new materials, insurers may pay actual cash value (ACV), which factors in wear and tear.
This depreciation can shave tens of thousands off what you need to rebuild, often leading homeowners to accept less simply to close the claim quickly.
Why Insurers Do This
- They protect their profits by reducing settlement amounts.
- They argue depreciation reflects your home’s prior condition.
- They lack incentive to update rebuild cost figures based on market rates.
In 2025, rising labor and material costs further highlight how outdated insurer estimates hurt homeowners nationwide.
How a Fire Insurance Attorney Helps
A seasoned fire insurance attorney will:
- Review your policy to confirm actual replacement cost coverage
- Challenge improper depreciation calculations
- Bring in industry experts to provide current rebuild cost estimates
- Negotiate with insurers using data, not guesses
This legal strategy ensures you receive full value, not an underpaid settlement that leaves you short of repair costs.
Case Example
A San Diego homeowner received a settlement that depreciated structural costs by 40%, even though the home was newer and well‑maintained. After attorney involvement, the depreciation was removed, and the homeowner received a significantly higher payout—enough to fully rebuild under current market conditions.
Conclusion: Fire Damage Depreciation
Don’t let depreciation erode your fire claim. If your insurer is paying less than what it costs to rebuild, you need an experienced fire insurance attorney on your side.
Contact The Law Eagles for a free consultation and reclaim the value you deserve.