Here is an insurance claim question that we answered as a contributing member of experts for United Policyholders who advocates for property owners. 

Q. What, if any, should be acceptable ACV on a driveway and walkway on a personal residence?  House was demolished by fire and working with adjuster on fair settlement value of these surfaces.  Policy provides ACV.

A. Your question of how much depreciation is to be taken on a concrete driveway is a good one as I cannot recall any recent arguments or positions taken on this subject. Having said that, you state your policy is an actual cash value (ACV) policy. Look in the policy to see if it provides a definition of actual cash value or the method to arrive at that figure.  As you did not provide that information, I’ll assume ACV is not defined.

So the question is, what if any depreciation should be taken on concrete paved surfaces. The first thing to consider is the condition and or age of the concrete.  As I do not have any photos to reference, I would assume given it is in a residential setting unlike a commercial drive, it probably is not cracked and broken up due to the weight of heavy equipment and heavy usage. So unless other conditions apply, my opinion is that depreciation should be very minimal if any at all. It really gets down to two things:  1. Condition and 2. Life Expectancy. The only other issue that may apply would be new code requirements to replace what was there to current building codes such as increased thickness of the concrete and perhaps more rebar to reinforce the concrete.

If there are no code upgrade issues, then ask the adjuster to show you the basis the company used to apply depreciation to concrete. They have to have something to support a position. Otherwise a concrete driveway could last indefinitely, should not be depreciated and paid on the fair market cost to pour a new one.

Finally, as a compromise, you may want to agree to 10% depreciation off the cost of a new drive. That way the adjuster can save some face with the home office examiner showing that he followed the ACV policy requirement. Hope this helps and good luck!

If you’re experiencing water damage from frozen pipes and have questions regarding any property insurance related issues, please call 800.321.4488 or contact us to submit a question to one of our public adjuster or insurance claim experts.