Depreciation Calculator for Property Claims

Estimate the actual cash value (ACV) of a damaged or lost property item by calculating depreciation based on the item's age, expected useful life, and current replacement cost. Used by adjusters and policyholders to determine fair claim settlements.

Current cost to replace the item with a new equivalent.
How old the item is at the time of the loss.
Typical lifespan of the item (e.g. roof: 20 yrs, appliance: 10 yrs).
Percentage of RCV retained at end of useful life (commonly 10%).
Straight-line is standard for most property claims.

Formulas Used

Straight-Line Depreciation (most common in property claims):

Annual Depreciation Rate  = 1 / Useful Life
Depreciable Base          = RCV − Salvage Value
Total Depreciation        = Depreciable Base × Annual Rate × Effective Age
Actual Cash Value (ACV)   = RCV − Total Depreciation

Double Declining Balance (accelerated):

Annual DDB Rate     = 2 / Useful Life
Book Value (year n) = Prior Book Value × (1 − DDB Rate)
                      [floored at Salvage Value]
Total Depreciation  = RCV − Book Value after n years
ACV                 = RCV − Total Depreciation

Recoverable Depreciation (RCV Policy):

Recoverable Depreciation = RCV − ACV
(Paid after proof of repair/replacement is submitted)

Assumptions & References

  • Straight-line depreciation is the industry standard for most personal property and structural claims (ISO, NAIC guidelines).
  • Salvage/residual value defaults to 10%, reflecting that most items retain some scrap or resale value at end of life.
  • Effective age is capped at the item's useful life — an item cannot be depreciated below its salvage value.
  • Actual Cash Value (ACV) = Replacement Cost − Depreciation, per the broad evidence rule used in most U.S. states.
  • Recoverable depreciation applies only under Replacement Cost Value (RCV) policies; ACV-only policies pay ACV with no recovery.
  • Useful life benchmarks: roofing 20–25 yrs, HVAC 15–20 yrs, appliances 10–15 yrs, electronics 3–5 yrs, carpeting 5–10 yrs (per Marshall & Swift / CoreLogic guidelines).
  • This calculator does not account for functional or external obsolescence, which may further reduce value in complex commercial claims.
  • References: ISO Property Loss Costs; NAIC Unfair Claims Settlement Practices Act; IRC §168 (MACRS for tax depreciation differs from insurance ACV).

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