Depreciation Insurance: The Best Questions to Ask

Depreciation Insurance: The Best Questions to Ask

When it comes to depreciation insurance there are questions you will want to ask to ensure that you understand the insurance you are getting, what it covers, and what you can expect if you ever need to use it. When you are purchasing depreciation insurance, you are getting insurance that protects items and property in your home from the natural process of depreciation that happens over time.

As items depreciate, if a catastrophe occurs and your home, property, and its contents are damaged, your homeowner’s insurance and other insurances you have will only pay you part of the cost to replace items that they feel have depreciated over time. When insurance companies take out the amount of value that you have lost from the item depreciating, this is where depreciation insurance comes in.

What is Depreciation Insurance? What Does it Do?

Depreciation insurance is what steps in when you have a claim and it will cover some (or all) of the cost differences between the items that were damaged or destroyed and the actual cash value (ACV) after depreciation that your homeowner’s insurance or other insurances are not willing to cover. Having an accurate idea of what your insurance will cover and will not cover is important when purchasing insurance and what it will not cover.

Understanding Depreciation:

Depreciation is generally calculated by the expected lifespan of the item that is getting insured and the length of time the item can be expected to last. The replacement cost value is based on what it would cost to replace the item at its current age and state, given how long the item is expected to last overall.

The condition of the item when it got damaged or destroyed will also play a role in how much money you can get back when you claim depreciation insurance. If the item is in poor shape, you may get less money, and if the item is in excellent or new condition, you might get a little bit more back.

How Do I Determine Depreciation Values of My Property?

Sometimes you might find it difficult to determine how much your property will depreciate each year. The U.S. government and the National Association of Home Builders publish a regular guide which helps people within the industry determine the actual value of their property and how much it depreciates on a regular (usually annual) basis. Using this guide is a great start to help you determine what you will be able to get back from your depreciation insurance.

The Questions You Want to Ask:

When you go to choose depreciation insurance, there are certain questions that you want to ask to make sure you are getting the depreciation insurance the works for you and gives the most money on your claim. The following are some of the of the questions you want to ask:

  • What type of damage does this depreciation insurance cover?
  • Am I covered for depreciation insurance if someone breaks into or robs my home?
  • Am I covered for depreciation insurance if my property gets damaged through a natural disaster (i.e. tornado, flooding, hurricane, etc.)?
  • How do you determine the difference between what my homeowner’s insurance paid (ACV of the items) and what you will pay?
  • What will my monthly payment end up being?
  • How much coverage do I get for my money (up to what cash value)?
  • Are there any situations in which damage to my property will not get covered?

These questions help tell you how much money your depreciation insurance company is willing to put into helping you recover the cost of your damaged or ruined property. Understanding these things before choosing a policy helps you choose a policy that fits your needs and ensures that you are covered when damages occur.


In the end, the main goal is ensuring that you are covered for depreciation insurance when you need it the most. Asking questions helps to clarify what you are getting and what you can expect if you ever have to make a claim.

For more information on purchasing the right depreciation insurance for your needs, please feel free to contact us via telephone at 203-723-8500 to reach the Branco Insurance Group for further assistance.


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