My parents bought a new home a few decades ago, and since then the value of the home has increased significantly.
They just told me there is some damage to the roof (which is the original roof) and they filed a claim with their home insurance company to get it replaced. The insurance company said they are willing to pay for the cost of a replacement roof, minus the deductible and the cost of depreciation for the roof.
My question is why would an integral part of a home (such as the roof) depreciate in value if the overall value of the home has increased? If a house is the sum of all of its essential components, and if the house has increased in value, then shouldn't the value of each essential component also increase?
Edit to address a few of the answers: My parents paid $X for the house and land combined. Now according to the local government's assessment for property tax purposes, the house itself is worth $2.8X, and the land itself is worth $2.4X.