What describes the reduction or disappearance of the value of property insured by a peril?

The appropriate term that describes the reduction or disappearance of the value of property insured by a peril is loss. This concept refers specifically to the decrease in value resulting from events covered by insurance policies, such as theft, fire, or any other peril that affects the property. In an insurance context, when a policyholder suffers a loss, they may file a claim to recover some or all of the lost property's value, depending on their coverage limitations and the nature of the loss.

Depreciation, although it relates to value, refers to the natural decline in property value over time due to wear and tear or obsolescence rather than due to specific events or perils. Liability refers to legal responsibility for harm or damages, which does not directly relate to property value in the same sense. Obsolescence describes a process where an item becomes outdated or less useful but does not specifically involve the reduction in value due to specific events or perils.