I understand that depreciation is applied to materials based on age and useful life but have never heard of depreciation being applied to labor and/or demo. How can you depreciate labor that is taking place at that moment? I was an adjuster in another state for the insurance company in question prior to working as a contractor in WA and we were taught to never depreciate labor. Any input would be greatly appreciated.
I am not clear about the nature of your case, but perhaps this provides some guidance.
I would ask the adjusted for any statutory, admin, or case law guidance that supports the position taken. Let me know how that goes.
That position makes no sense to me. Start with the policy provisions and look for language authorizing that type of depreciation. I doubt you will find any. Then either consult with an experienced attorney or give the WA State Insurance Commissioner's office a call and get some guidance there.