The labor question

Labor depreciation: the deduction hiding inside your estimate's lines.

Depreciation is supposed to measure used-up material life. When the same math is applied to labor — the roofer's hours, the painter's time — the deduction gets philosophical, and in nine states plus DC it got illegal. This guide shows you where labor depreciation lives on an estimate and what your state's position makes of it.

Where the labor deduction lives

Estimate lines bundle material and labor into one price, and the depreciation percentage is usually applied to the whole line. The labor component of a roofing line can be half its price. Depreciating it means the 'wear' of a worker's afternoon is withheld from your check — the practice this page is about. Find it: pick any line, read its depreciation figure, and compare it against the line's material-only cost. If the withheld amount exceeds the material's age share, labor is being depreciated.

The map: banned, allowed, mixed

PositionStates (at build)Authority shape
BannedAZ, CA, DC, IL, MO, MT, TN, VT, WAStatute, regulation, or appellate case — e.g., Washington's WAC 284-20-010 (2022), California's 10 CCR § 2695.9, Tennessee's Lammert (2019)
AllowedAR, CO, FL, IN, KS, LA, NE, NC, OK, SCCourt decisions upholding the practice (Arkansas by statute, § 23-88-106)
MixedAL, AK, KY, MI, MN, MS, OH, PA, TXNarrow or conflicting authority — Texas has both a federal allowance (Tolar, 2022) and a state-court ban (Sims, 2025, under review)

From the HKR 50-state survey (updated Aug 28, 2025), spot-checked at build; the per-state authorities are in the state table. There is also a live class action on a version of this practice — see the Allstate page (claim deadline Jan 29, 2027).

What to do with the finding

  1. Banned state: the deduction is a letter: identify the lines, cite the authority from the state table, ask for the corrected payment in writing.
  2. Allowed state: the deduction stands unless your policy's own wording says otherwise — read the Loss Settlement condition; a minority of policies promise RCV-based labor treatment expressly.
  3. Mixed state: the argument is live but unsettled — worth the letter, not worth a lawsuit alone; bundle it with any supplement items.
  4. Everywhere: the depreciation still has to equal the material's actual age share. Inflated percentages are arithmetic errors in any state.

Run your own numbers. The free checker takes your state, your dates, and the figures on the insurer's estimate — and returns the dollars still held back, your real deadline, and the next document to send. Run the checker →

The working papers for this fight

The pages above are the map. The kit is the paperwork: the proof packet that releases the money, the letters that protect the clocks, and the complaint pack for when the stall continues.

Included in the $39 DepreciationDecoded Kit

  • The supplement request pack: how to document missed line items and code-required items, catch depreciation applied twice to the same line, and argue overhead and profit on multi-trade jobs — in the estimate's own line-item language
  • The state inserts: the labor-depreciation challenge and matching-law lines for your state, quoted from the dataset with their citations, ready to paste into any letter above
  • The proof packet: the completion-evidence checklist (final invoice, photos tied to the scope of loss, completion certificate) plus the submission letter that asks for release in the insurer's own language
Get the $39 DepreciationDecoded Kit

One payment, yours to keep. We never ask you to upload your policy — you file everything yourself. See everything inside the kit →

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