Depreciation is a term you’ve likely heard, but its implications for your insurance policy might not be as clear. Whether you’re protecting your home , car , or belongings , depreciation plays a crucial role in determining the value of your claims. At Riseson Insurance , we help policyholders across Tempe , Phoenix , Scottsdale , Tucson , Gilbert , and Chandler navigate these nuances to ensure they’re well-protected.

Depreciation refers to the reduction in value of an asset over time due to factors like age, wear and tear, or obsolescence. For example:

A new television loses value each year as newer models hit the market. A car starts to depreciate the moment you drive it off the lot.

In insurance, depreciation impacts how much you’ll receive if you file a claim for a damaged or stolen item.

When filing a claim, the reimbursement amount depends on whether your policy covers items at actual cash value (ACV) or replacement cost value (RCV) :

1. Actual Cash Value (ACV): ACV policies account for depreciation, meaning the insurer reimburses the current market value of your item, not its original cost. Example: If your 5-year-old couch cost $2,000 but is now worth $800 due to depreciation, an ACV policy pays $800.

2. Replacement Cost Value (RCV): RCV policies reimburse you for the cost of replacing the item with a new one of similar kind and quality, regardless of depreciation. Example: Using the same couch example, an RCV policy would pay the current price for a new equivalent couch.

Home Insurance : Depreciation affects payouts for personal property claims if your policy is based on ACV rather than RCV. Auto Insurance : Depreciation significantly reduces the value of your car, especially for total loss claims. Business Insurance : Equipment and inventory may be subject to depreciation, impacting claim amounts.

Without considering depreciation, you might end up underinsured or face unexpected costs after a loss. For example, opting for ACV coverage to save on premiums could leave you with insufficient funds to replace critical items.

At Riseson Insurance , we believe in empowering our clients with knowledge and tailored policies. Serving Tempe, Phoenix, Scottsdale, Tucson, Gilbert, and Chandler, we’ll help you:

Evaluate Your Needs: Determine whether ACV or RCV policies suit your situation. Understand Your Coverage: Clarify how depreciation impacts your claims. Ensure Financial Security : Select policies that align with your budget and lifestyle.

Understanding depreciation is key to making informed decisions about your insurance coverage. Whether it’s your home, car, or personal belongings, ensure you’re adequately protected against financial loss.

Contact Riseson Insurance at 602-460-5470 for a personalized consultation. We proudly serve residents in Tempe, Phoenix, Scottsdale, Tucson, Gilbert, and Chandler, offering expert guidance to safeguard your future. Let us help you find the right balance between coverage and cost!

What is Depreciation?

How Depreciation Affects Insurance Claims

The Role of Depreciation in Different Policies

Why Understanding Depreciation Matters

How Riseson Insurance Can Help

Don’t Let Depreciation Catch You Off Guard

• A new television loses value each year as newer models hit the market.
• A car starts to depreciate the moment you drive it off the lot.

• Example: If your 5-year-old couch cost $2,000 but is now worth $800 due to depreciation, an ACV policy pays $800.

• Example: Using the same couch example, an RCV policy would pay the current price for a new equivalent couch.

• Home Insurance : Depreciation affects payouts for personal property claims if your policy is based on ACV rather than RCV.
• Auto Insurance : Depreciation significantly reduces the value of your car, especially for total loss claims.
• Business Insurance : Equipment and inventory may be subject to depreciation, impacting claim amounts.

• Evaluate Your Needs: Determine whether ACV or RCV policies suit your situation.
• Understand Your Coverage: Clarify how depreciation impacts your claims.
• Ensure Financial Security : Select policies that align with your budget and lifestyle.