CANADIAN INSURANCE TERM
Depreciation
A reduction in the value of property associated with factors such as age, condition, wear or obsolescence.
Plain-language definition. A real policy, endorsement and provincial law can use more specific wording than a glossary summary.
TermDepreciation
ContextCanadian insurance
Source typeIndustry glossary
Policy wordingControls claim
What does Depreciation mean?
A reduction in the value of property associated with factors such as age, condition, wear or obsolescence.
Depreciation helps explain why actual cash value can be lower than the cost to replace an item with a comparable new item.
Depreciation in practice
A laptop purchased several years ago may have a lower depreciated value today even though replacing it with a comparable new device costs more.