2- Most of the insureds prefer to be valued on actual cash basis rather than on replacement cost. 3. Deduction and depreciations are the same concepts used by the insurer 4. Depreciation refers to the fact that the insured has to bear part of the damage before the insurer is obligated to make any payment 5. Deductibles decrease moral hazards 2- Most of the insureds prefer to be valued on actual cash basis rather than on replacement cost. 3. Deduction and depreciations are the same concepts used by the insurer 4. Depreciation refers to the fact that the insured has to bear part of the damage before the insurer is obligated to make any payment 5. Deductibles decrease moral hazards