what is depreciation?
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UPDATED: Jan 23, 2012
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Insurance Question from Lemon Cove, CA
Asked on 01/23/2012
what is depreciation? NULL
Answer given on January 26, 2012
Depreciation is a term used mostly in the insurance industry. It means the value of a property, or car, is reduced, or depreciated, due to age, wear and tear or similar. Auto insurance settles damages to a car based on the repair costs or, if the car is totaled, is based on the current actual cash value of the car. This is a depreciated value of the car. If the radio or tires are damaged or stolen from a car, and the rest of the car remains undamaged, the insurance company most likely will depreciate the value of those items based on their age or reduced value.The insurance policy usually desscribes when the insurance company will depreciate parts of a car and how it works. You can also ask your insurance agent to help explain how depreciation is applied in your claim.
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