Why did the insurance company withhold depreciation?
A. There are two reasons that the insurance companies hold some money back. The first reason is to make sure that you get the work done. Past experience has shown them that, if they give the customer all the money up front, many people end up spending it on something else. The second reason is that they wish to make sure that you pay your full deductible. The insurance companies reason that, if you are given all the money to begin with, many people would naturally try to find a contractor who would perform the job for the dollar amount in hand. By holding a retainage amount, they can adjust the amount of the final payout based on the roofing contractor’s invoice, thus assuring that the customer does pay the deductible.
