babymakesone said:Your in-laws need to talk with their insurance agent about what kind of policy they have & how it reads.
The insurance company is not depreciating the items - they are holding back a portion of the money until the items are replaced. This is the way that most companies do things.]
Ofcourse they are taking depreciation. Property policies with replacement cost coverage don't pay replacement cost until you prove you replaced the item; they pay actual cash value only.
And yes, if they have RC coverage on contents they undoubtedly have it on their home as well.
They need to read their policy from front to back. If they don't understand something, ask for a meeting with the adjuster so they can show them in their policy why they are doing what they are. If that doesn't explain the situation, see a lawyer.