Depreciation
What the insurer knocks off for age and wear.
What it means for your money
Depreciation is the gap between what an item costs new and what the insurer says it was worth on the day you lost it. Applied correctly, it is a normal policy mechanic rather than a trick.
The question worth asking is not whether depreciation was applied — it almost always is — but whether the rate and the assumed condition match the item you actually owned. A five-year-old mattress and a five-year-old dining table do not wear at the same speed.
Where the number comes from
From a depreciation schedule the carrier applies by category: an assumed useful life, the item's age, and sometimes a condition adjustment. Ask for the schedule if the numbers are not shown per line.
See this on a real dining table
- Dining table, 5 years old
- Replacement cost today
- $900
- Assumed useful life for furniture
- 20 years
- Depreciation applied, 5 of 20 years
- −$225
A 20-year life gives $225. If the carrier assumed a 10-year life instead, the same table depreciates $450 — same item, double the deduction. That assumption is the thing to check.
Depreciation sits next to actual cash value, recoverable depreciation and reconciliation. They tend to arrive together.
Indemnia builds the itemized list this all gets applied to, with the receipt attached to the line it proves. See how it works.