Depreciation

This is the drop or reduction in the value of an item or property over time. There are a number of factors affecting the reduction of the actual value of a property. These include collision, as can be seen from that experienced by car drivers.

Another factor affecting the drop in value of an item is accident. Not unusual for car drivers, but it can greatly reduce the market value of a car or any other property.

Some auto insurance companies do not offer coverage for value reduction of a car, but can provide insurance coverage if such is caused by factors that are insurable, e.g. collision, accident etc

If you intend to have your car insured when its value is reduced by an insurable factor such as collision, then you are to have your car insured under the collision coverage of your insurer.

Posted in: Glossary of Auto Insurance (D)