Insurance Appraisal Glossary

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40 terms

A C D E H I L M O P R S U W X

Actual Cash Value (ACV): What damaged property is worth at the time of loss, usually figured as replacement cost minus depreciation. Many policies pay this figure first.
Additional Living Expense (ALE): The extra cost of living elsewhere while your home cannot be lived in after a covered loss, such as rent, meals and mileage above your normal spending. It usually falls under Coverage D.
Amount of Loss: The dollar value of the covered damage. In most policies, this is the only question an appraisal panel is asked to decide.
Appraisal Award: The signed written decision of the appraisal panel stating the amount of loss. It generally takes effect once two of the three members sign.
Appraisal Clause: The section of a property policy that lets either party demand appraisal when they disagree on the amount of loss. Its exact wording varies by insurer.
Contents: Another word for personal property: the movable items inside a home or business, as opposed to the building.
Coverage A (Dwelling): The part of a homeowners policy that pays for damage to the house itself and attached structures such as a porch or garage.
Coverage B (Other Structures): Coverage for detached buildings on the property, such as a barn, shed, fence or detached garage. The limit is often a percentage of Coverage A.
Coverage C (Personal Property): Coverage for belongings like furniture, clothing, tools and appliances. Some items, such as jewelry or firearms, may have lower sub-limits.
Coverage D (Loss of Use): Coverage for additional living expenses or lost rental income when a covered loss makes the home unusable.
Deductible: The share of a covered loss you pay before the insurer pays. It is subtracted from the claim payment rather than paid to the insurer.
Depreciation: A reduction in value for age, wear and condition. Insurers subtract it from replacement cost to reach actual cash value.
Derecho: A long-lived, fast-moving line of severe thunderstorms producing widespread straight-line wind damage. The June 2012 derecho knocked down trees and power lines across much of West Virginia.
Earth Movement Exclusion: A common policy exclusion for damage caused by shifting ground, such as landslides, sinking or settling. Its wording and any exceptions vary, so check your policy.
Essential Property Insurance Association: West Virginia’s insurer of last resort for property owners who cannot get coverage in the regular market. Its policies carry their own terms and limits.
Holdback: The portion of a replacement cost claim, usually the recoverable depreciation, that an insurer withholds until repairs are completed.
Ice Dam: A ridge of ice at a roof’s edge that traps melting snow, which can back up under shingles and leak into ceilings and walls.
Independent Adjuster: An adjuster hired by an insurance company on a contract basis to inspect and estimate a claim. Despite the title, they work for the insurer.
Line Item: A single entry in an estimate describing one task or material, with a quantity, unit and price, such as removing and replacing a square of shingles.
Matching: The question of whether replacement materials must reasonably match undamaged areas in color, texture or style. How it is handled depends on the policy and the facts.
Mine Subsidence Coverage: An endorsement covering damage from the collapse of underground mines. In West Virginia it is commonly offered with dwelling coverage, often with a capped limit and its own deductible, so check your endorsement.
Mitigation: Reasonable steps taken after a loss to prevent further damage, such as tarping a roof or drying out a wet basement. Policies generally expect owners to take them.
Offices of the Insurance Commissioner (OIC): West Virginia’s insurance regulator, based in Charleston. Its consumer services staff accept complaints about insurers and claim handling.
Ordinance or Law Coverage: Coverage for extra costs to bring repaired portions of a building up to current building codes. It often has a separate limit.
Overhead and Profit (O&P): Amounts added to an estimate to cover a general contractor’s business costs and margin when coordinating multiple trades. Commonly shown as a percentage of the repair cost.
Percentage Deductible: A deductible set as a percentage of a coverage limit rather than a flat dollar amount, sometimes applied to wind or hail losses.
Pitch: The steepness of a roof, stated as inches of rise per 12 inches of run. Steeper roofs generally cost more to repair because of safety and labor needs.
Proof of Loss: A formal, often sworn statement of the amount you claim. Some policies require it within a set period after the insurer asks for it.
Public Adjuster: A licensed professional hired by the policyholder to prepare and negotiate a claim, usually for a percentage of the payment.
Recoverable Depreciation: Depreciation that can be paid back to you once repairs or replacement are completed under a replacement cost policy.
Replacement Cost Value (RCV): The cost to repair or replace damaged property with materials of like kind and quality, without subtracting depreciation.
Reservation of Rights: A letter in which an insurer says it is investigating or paying a claim while keeping the option to deny coverage later.
Scope: The full list of work needed to repair the damage. Many disputes over a claim are really disputes over scope.
Square (Roofing): A roofing unit equal to 100 square feet of roof surface. Shingle and metal roof estimates are commonly priced per square.
Suit Limitation: A policy provision setting the time within which a lawsuit against the insurer must be filed. Ask a West Virginia attorney how it applies to your claim.
Supplement: A request to add items or costs to an estimate after the first one is written, often because hidden damage turns up during repairs.
Umpire: The neutral third member of an appraisal panel who decides items the two appraisers cannot agree on.
Unfair Trade Practices Act: A West Virginia law that, among other things, describes unfair claim settlement practices by insurers. Whether it applies to a given claim is a question for a West Virginia attorney.
Wind-Driven Rain: Rain forced into a building through openings created or widened by wind. Whether interior water damage is covered may depend on how it entered.
Xactimate: Estimating software widely used by insurers, adjusters and contractors to price repairs using regional cost data.