Policy Terms

Depreciation

Depreciation is defined as: The decrease in value of property over time due to age, wear, tear, and obsolescence.

Depreciation reduces the value of property over time. In insurance, it's the difference between replacement cost and actual cash value.

The replacement cost of damaged property minus depreciation due to age, wear, and tear.

The amount it would cost to replace damaged property with new property of similar kind and quality, without deducting for depreciation.

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