2026-09-09 · District of Columbia · Regulation

The District of Columbia's insurance regulator has told every property and casualty insurer licensed in the District that depreciating the labor component of a repair estimate is an unfair claims settlement practice. For a condominium association settling a roof, envelope or water-damage claim on an actual-cash-value basis, that is the single most useful sentence a District regulator has published in years.

Bulletin 25-IB-001-08/12 was issued August 11, 2025 by Commissioner Karima M. Woods of the Department of Insurance, Securities and Banking, addressed to “All Property and Casualty Insurance Companies Licensed to Do Business in the District of Columbia.”¹

What it says

The operative language is short and unhedged:

“This Department considers the depreciation of labor and other nontangible items in the definition of ACV to be an unfair claims settlement practice pursuant to D.C. Code § 31–2231.17(b)(6). For the purposes of this Bulletin, nontangible items are defined as labor, taxes, fees, and overhead and profit.”

And, prospectively: “For the reasons stated above, the Department will not approve any policy form with language that allows for depreciation of labor.”

The reasoning is equally direct. “Labor, unlike physical materials, does not lose value or break down over time. The practice of depreciating labor expenses on property damage claims float a significant part of the labor repair costs to the consumer. This unfairly shifts the burden to the consumer during the repair process.”

Why this lands hardest on associations

Because of what association claims are made of.

An actual-cash-value settlement pays replacement cost less depreciation, with the withheld amount recoverable once the work is done. On a residential roof, a facade repair or a burst-pipe remediation, labor is the majority of the cost. Materials are the smaller half. So a carrier that applies its depreciation factor to the whole estimate — rather than to the materials line alone — withholds substantially more of the claim up front than the depreciation of the physical roof would justify.

For a District association, that gap is a cash-flow problem before it is anything else: the association has to fund the repair to trigger recovery of the withheld depreciation, and the amount it must front is the amount in dispute.

1. D.C. Department of Insurance, Securities and Banking, Bulletin 25-IB-001-08/12 (Aug. 11, 2025) ↩
2. DISB, Insurance Bulletins index ↩