depreciation

The usual approach is straightforward: take the cost of replacing the item today, estimate its expected useful life, and reduce the figure in proportion to the life already used. An item halfway through its expected life settles near half its replacement cost, adjusted for its actual condition.

Condition matters as well as age. A well-maintained item with documented care is valued better than an identical item with no history at all, which is one reason turnover documentation pays off in places hosts do not expect. The resulting figure is the actual cash value.

Soft goods lose value quickest, because they are replaced often and wear visibly: linens, towels, cushions and rugs. Consumer electronics follow, since the market price of an equivalent falls while the item ages. Furniture sits in the middle. Structural elements and fixed installations depreciate slowest.

This ordering is why an inventory claim for towels recovers so little, as covered in missing linens and inventory shrinkage, and why hosts are better off pricing textile replacement into the business than pursuing it through claims.

Labour and services have no age to deduct. A plumber clearing a blockage, a glazier fitting a pane, a remediation firm treating an odour, a locksmith changing a cylinder: those invoices tend to be reimbursed close to their face value.

That asymmetry is the most useful thing to know about damage claims. Where repair is genuinely the right remedy, claiming the repair with a trade quote attached usually recovers a larger share of your real loss than claiming a replacement that will be written down. See how much AirCover actually pays.

Keep receipts and purchase dates for anything expensive, so age is documented rather than assumed. Photograph condition at turnovers as a matter of routine. Choose repair over replacement where a professional says repair is reasonable, and attach the professional's recommendation.

Then treat the remaining gap as a planning number rather than a grievance. It is the difference between what an incident costs you and what any programme returns, and it belongs in your pricing and your insurance decision. Is AirCover really free works through that gap in detail.