Solutions for Risk Exposure®


Depreciation and Insurance Claims

What is depreciation?

Depreciation is a measure of age and condition, with a given lifetime.

It may be referred to as a value (in dollars), or a percentage, or a number of years. However expressed, "depreciation" accounts for the difference between what something cost, new, and what it might be worth, now. Commonly, for insurance claims, the calculation determines the difference between current replacement cost and current value.

Why is depreciation important? Because, in the end, an insurance policy may only pay you current value or depreciated value for a damaged thing, as part of a residential or commercial property claim, a claim from an automobile wreck, or from a contents claim after a hurricane, fire or flood. ( An example of how depreciation is calculated, and a claim is paid. )

A typical policy might use the phrase: "Actual Cash Value" ("ACV") as part of the language describing how the claim is settled. One method of estimating "Actual Cash Value" uses current replacement cost less the depreciation.

For assistance after a loss to your business, home or other property
Contact John Ruskin at the address or phone number, below.

John Ruskin is a Louisiana attorney
and a licensed adjuster in multiple states,
with a background in business, residential and environmental claims.
Additional background on John Ruskin is available here.

There is no fee for an initial consultation.

How Depreciation Impacts Your Insurance Claim

An Example of a Depreciation Calculation - How to Estimate Depreciation

Other related concepts

Lifetime - How long a thing lasts . . .

Most common things wear out over time -- that amount of time is that thing's lifetime.

Salvage value

Salvage value - What it's worth, now that it is useless . . .

What is "Actual Cash Value" or "ACV" in an insurance policy

What is Actual Cash Value , and how is it estimated or calculated for insurance claims

For more information on how to prepare for an insurance claim, or assistance in the adjustment of insurance claims, please contact John Ruskin at the address or phone number, below.