What is the term for the amount deducted from an insurance claim for depreciation?

The term that specifically refers to the amount deducted from an insurance claim for depreciation is known as "depreciation deduction." In the context of insurance, when a policyholder files a claim, the insurance company assesses the value of the damaged or lost property. This assessment often includes an evaluation of how much value the property has lost over time due to wear and tear, obsolescence, or other factors. This reduction in value is what is referred to as depreciation.

When settling a claim, the insurance provider may apply this depreciation to determine the final payout amount. Therefore, the depreciation deduction directly impacts the monetary compensation the policyholder receives, reflecting the real value of the property as it existed prior to the loss, rather than the original purchase price.

Other terms provided in the options do not accurately describe this specific deduction. An adjustment fee might be associated with processing costs but does not pertain to depreciation itself; a claim reduction can refer to any decrease in the value of a claim but lacks the specificity of depreciation; and a settlement discount is generally not used in insurance terminology in this context, as it usually refers to reductions offered for early settlement or payment rather than depreciation calculations.