What does Depreciation mean? Read on to discover the definition & meaning of the term Depreciation - to help you better understand the language used in insurance policies.
The decrease in the value of property over a period of time, usually as result of age, wear and tear from use, or economic obsolescence. Actual physical depreciation (wear and tear from use) is subtracted from the replacement cost of insured property in determining its actual cash value (ACV); courts in some jurisdictions have allowed insurers to deduct depreciation due to economic obsolescence as well.
We hope the you have a better understanding of the meaning of Depreciation.