Which term refers to the valuation method that takes into account depreciation for property insurance?

The term that refers to the valuation method accounting for depreciation in property insurance is Actual Cash Value. This approach considers the current value of the property, factoring in any depreciation that has occurred. Thus, Actual Cash Value is calculated by taking the replacement cost of the property and subtracting any depreciation.

This valuation method is particularly relevant in insurance policies because it reflects the amount that an insurer would pay out in the event of a loss, ensuring that policyholders are compensated for the property's worth at the time of the loss rather than its original value or the cost to fully replace it. This principle helps to prevent over-compensation in the case of property loss, which can be essential in managing insurance claims appropriately.

Other terms such as Replacement Cost refer to the amount necessary to replace property with similar kind or quality without depreciation considered. Market Value represents the price at which property would likely sell in the current market and is not directly linked to depreciation in an insurance context. Cash Value, while similar to Actual Cash Value, is often a more generic term and not necessarily used in the same context as these specific insurance valuation methods.