Your first cheque is usually the replacement cost, minus depreciation, minus your deductible. You get the depreciation back later — but only if you complete the repairs and claim it before your policy's deadline.
Water damage
Start with the shape of it, because the first payment surprises almost everyone.
Replacement cost value (RCV) is what it costs to replace the damaged property new. That is usually the headline number on the estimate.
Actual cash value (ACV) is RCV minus depreciation — what the used item or material was worth immediately before the loss.
Your first payment is typically ACV, minus your deductible. Not RCV. If your estimate says one thing and your cheque says considerably less, that gap is almost always depreciation plus deductible rather than an error.
If your policy settles at replacement cost, the withheld depreciation is recoverable — it comes as a second payment after the repairs are done. If your policy settles at actual cash value only, it does not come at all.
The first question to ask your adjuster is therefore not “how much” but “is this policy ACV or RCV?” That single answer changes everything downstream.
Call (719) 618-9013. Read us the estimate and we will tell you what the payment structure is likely to be.
📞 Call (719) 618-9013Colorado Springs
It comes off the settlement, not off the top of the repair.
The deductible is your share of the loss. The carrier subtracts it from what it would otherwise pay. You still owe the full cost of the repair to whoever performs it — the deductible is simply the portion you fund yourself.
Two points people get wrong regularly:
Water damage
Almost certainly two, and in Colorado this is the section that costs people the most.
Colorado homeowners policies typically carry a standard all other perils deductible plus a separate wind and hail deductible — and the second is substantially larger. Wind and hail are usually bundled, so a claim for either triggers the same deductible.
Why this lands on water damage claims: the two-stage loss. Hail opens the roof, the next storm brings water in, and the claim gets characterised as wind and hail. The interior water damage is then subject to the larger deductible, not the standard one.
Check your declarations page for both figures before you file anything. If the characterisation is arguable — a plumbing failure that happens to occur during storm season, say — that is a conversation worth having with your adjuster on day one rather than after the settlement arrives.
Colorado Springs
Larger than most people expect, and the structure has shifted.
Colorado is among the states with the highest wind and hail deductibles in the country. These are typically set either as a flat amount in the range of $2,500 to $10,000, or as a percentage of Coverage A — your dwelling limit — usually between 1% and 5%.
Most major carriers in Colorado have moved off flat-dollar amounts onto percentages. Many now require a minimum of 1% or 2%, and that is applied particularly along the I-25 corridor, in metro Denver and in the foothills. Colorado Springs sits on the I-25 corridor.
For scale: the average wind and hail deductible in Colorado is reported at around $5,664, against an average dwelling coverage of about $431,130 — roughly 1.3%.
The practical consequence of a percentage deductible is that it grows with your home’s value. On a dwelling limit of $500,000, a 2% deductible is $10,000 out of pocket before the carrier contributes anything. Homeowners who last read their policy when it was a flat $1,000 are frequently unaware of this until they claim.
The underlying reason is straightforward. Hail accounts for 26% to 54% of a Colorado homeowner’s premium depending on county, and roughly 50% along the Front Range, according to the Colorado Division of Insurance’s February 2026 analysis of data covering about 80% of the market across 11 counties. Carriers have shifted more of that exposure onto the deductible.
Water damage
A few things, all worth asking your agent about — before a loss rather than after.
We do not sell insurance and have no interest in which way you go. But knowing the number before you need it is free.
Tell us where it came from and how long it has been there. We will give you a time, not a window.
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Colorado Springs
This is the mechanic that costs homeowners the most money through simple non-action.
If your policy settles at replacement cost, the carrier pays ACV first and withholds the depreciation. That withheld amount is recoverable depreciation — often called the second cheque or the holdback.
You receive it after the repairs are actually completed and you have submitted the invoices. Three things follow:
Ask three specific questions and write the answers down: how much is being withheld, exactly what documentation releases it, and what the deadline is.
If the repair will run past the deadline for a legitimate reason — a contested supplement, contractor availability, a long-lead material — ask in writing for an extension before the date passes, not after.
Water damage
These are round illustrative numbers chosen to show the maths. They are not a claim about what any repair costs in Colorado Springs.
📞 Call (719) 618-9013Suppose the estimate to repair a water-damaged room comes to $10,000 RCV. The adjuster applies $2,000 of depreciation to the materials, and your all-other-perils deductible is $1,000.
| Step | Amount |
|---|---|
| Replacement cost value (RCV) | $10,000 |
| Less depreciation | −$2,000 |
| Actual cash value (ACV) | $8,000 |
| Less deductible | −$1,000 |
| First payment to you | $7,000 |
You then have the work done. It costs the estimated $10,000. You submit the completed invoice.
| Step | Amount |
|---|---|
| Recoverable depreciation released | $2,000 |
| Total received | $9,000 |
| Your net out of pocket | $1,000 — your deductible |
If you never complete the repairs, you keep the $7,000 and forfeit the $2,000. Your net position is worse and the damage is still there.
Now run the same loss as a hail-characterised claim with a 2% wind and hail deductible on a $500,000 dwelling limit — a $10,000 deductible. The ACV is $8,000, the deductible is $10,000, and the claim pays nothing at all. That is not an unusual outcome in this state, and it is why knowing which deductible applies matters before you file.
Colorado Springs
Depreciation that you will not get back, whatever you do.
It appears in two situations:
Roof schedules are worth specific attention in Colorado. Some policies apply a depreciation schedule to roofing based on age, meaning an older roof settles at a materially reduced figure even on an otherwise covered claim. Given how much hail exposure sits in Colorado premiums, this is a clause worth reading before the storm rather than after.
Water damage
Usually in two or three stages, and the third one catches people out.
If you have a mortgage, expect the lender to be named on the cheque on anything beyond a modest amount. That means endorsing it to them, and them releasing funds in stages against inspections. It is normal and it adds time. Call your servicer early and ask what their process and thresholds are, because that timeline often determines when your contractor can start.
Colorado Springs
That is a supplement, and on water damage it is routine rather than adversarial.
The full extent of a water loss is frequently only visible once material is removed — wet insulation behind a wall, staining on framing, growth in a cavity nobody could see. A supplement is a request to add scope, supported by documentation.
What makes a supplement succeed: photographs of what was found once the wall came out, moisture readings that map the wet area, and a line-item revision rather than a request for “more money.”
What makes it fail: raising it after the work is done, with no photographic record of what was behind the material that has now gone in a skip.
Water damage
Six, roughly in order of how much money they lose.
None of those are about arguing harder. They are about knowing the structure.
Colorado Springs
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