diminution in value

Diminution in value refers to a reduction in the worth of a property or asset, often caused by damage, defects, or other unfavorable factors that make it less desirable or functional. For example, if a building suffers structural damage or a property is marred by significant cosmetic issues, its market value decreases. This concept is important in areas like insurance claims and real estate, where the decrease in value may need to be compensated or considered in transactions. Essentially, it reflects the decreased appeal or utility of an asset, impacting what someone is willing to pay for it.