How to Calculate Homeowner's Insurance Depreciation
Depreciation plays a bigger role in homeowner's insurance than many people realize or understand. It's solely important in the calculation of a home insurance claim. Even though the insurance company is the one that ultimately decides the depreciation, it's still important for homeowners to understand how their home is being depreciated for insurance purposes.
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Instructions
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Make a list of the destroyed or damaged property.
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Speak to an insurance adjuster to determine how the insurance company figures depreciation. Some insurance companies use a depreciation table, in which case, the adjuster can tell you exactly how to figure your depreciation. Other insurance adjusters determine depreciation based on a guess, which is the scariest way to come to a conclusion. Finally, some insurance adjusters use computer software, which automatically determines depreciation after specific information is entered into the software.
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Obtain a depreciation table. You can search online or ask your insurance adjuster for a copy of the table he uses to calculate figures. Depreciation tables are standard. Websites, such as ClaimsPages.com, offer insurance information and claims forms, as well as depreciation calculators. A calculator automatically computes the depreciated value of an item according to the item's age, to account for wear and tear, and replacement value.
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Look at the depreciation table to determine how much the property will be depreciated. Property depreciation insurance refers to coverage, which provides replacement of damaged or destroyed property. It's typically based on the cost of new products. It's important to find out further information about depreciation and to take a look at your current homeowner's policy.
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Tips & Warnings
Challenge insurance depreciation decisions that you think are invalid.
Participate in as many of the insurance steps as you can, and have a clear understanding of your homeowner's insurance and how to make a claim.
Find out how your insurance company calculates depreciation values before attempting to do it yourself. Each insurance adjuster may use a different method or a different table. It's acceptable to ask the insurance company for a copy of the depreciation table it's using.
