#Depreciation refers to the reduction in the value of an item over time due to factors like use, age, wear and tear, or obsolescence.

In the context of insurance, depreciation is used to calculate the #actualcashvalue (ACV) of an item, which is the replacement cost minus the depreciation.

For example, if you have a piece of furniture that you bought for $1,000 five years ago, its value today might be significantly less due to depreciation. If it gets damaged and you file a claim, the insurance company will consider its depreciated value rather than its original purchase price.

Do you have any specific questions about how depreciation affects insurance claims or policies?

Sincerely,

Harpreet Singh, Most lovable ❤️ Insurance Broker in Ontario

Phone – 6476217890

Email – insurancechampion@outlook.com

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