Policy Terms
Depreciation
Definition
The decrease in the value of property over time due to wear, age, and obsolescence. In insurance, depreciation is used to calculate the actual cash value of a damaged or destroyed item.
In Zach’s Words
“Depreciation is why your five-year-old laptop isn't worth what you paid for it. Everything loses value over time — your roof, your car, your furniture. When insurance calculates what they owe you under ACV, depreciation is the bite that comes out.”
— Zach Nadler, CIO