When a claim occurs, one of the biggest disillusionments for policyholders is discovering the concept of depreciation. Many mistakenly believe that if their sofa bought for 2000 € 5 years ago goes up in smoke, the insurance will pay them 2000 € to buy a new one. In the vast majority of cases, that's not how compensation works.
What is Actual Cash Value?
By default, most home insurance contracts compensate your movable property at Actual Cash Value (or replacement value minus depreciation). As soon as a good is purchased, it loses value over time due to wear and tear and technological obsolescence.
The mathematical formula used by the loss adjuster is generally:
Price of the new item on the day of the loss - (Annual depreciation percentage × Age of the item)
How does the expert calculate depreciation?
The depreciation rate is not set by law, but each insurance company has its own grid, often shared by experts. As an indication:
- IT & High-Tech: 20% to 30% per year (depreciation is extremely fast).
- Home appliances: 10% to 15% per year.
- Standard furniture: 10% per year.
- Clothing: Up to 30% the first year, then 10% per year.
Example: A computer purchased for 1500 € 3 years ago suffers water damage. With a depreciation of 25% per year, its discount is 75%. The insurance will only reimburse you 375 €.
The crucial role of the invoice and the date of purchase
The expert needs two fundamental pieces of information to make their calculation: the purchase price and the purchase date. If you cannot prove these two elements, the expert will apply a maximum flat-rate depreciation (often 80% or more), or even refuse compensation.
The solution: preventive inventory
To avoid seeing your goods arbitrarily devalued, you must keep solid evidence. With the SafeInventa application, you scan your invoices at the time of purchase. The application timestamps the proof and encrypts it. In the event of a claim, you export a complete file that proves the exact age of your goods, helping the expert to apply a fair and justified depreciation rate, not a default penalty.