Insurance Claims Glossary

Replacement cost minus depreciation. If a policy pays ACV, the insurer subtracts an amount for the item's age and wear before paying out — a 10-year-old roof is paid out as a 10-year-old roof, not a new one.

What it costs to repair or replace damaged property with new materials of similar kind and quality, with no deduction for depreciation. Many policies pay ACV first and release the depreciated "recoverable depreciation" portion only after repairs are completed.

The gap between ACV and RCV that a policy holding RCV coverage will pay once repairs are completed and documented. It isn't automatic — it has to be requested with proof the work was done.

A formal, signed statement to the insurer detailing what was damaged, when, and the amount being claimed. Most policies require one within a set number of days of the loss — missing that deadline can jeopardize the claim.

A dispute-resolution process written into most property policies: when the policyholder and insurer disagree on the amount of a loss (not whether it's covered), each side names an appraiser, the two appraisers name an umpire, and the resulting decision is binding.

A licensed professional who represents the POLICYHOLDER — not the insurance company — in preparing, documenting, and negotiating a property insurance claim. Distinct from the insurer's own adjuster, called a company or staff adjuster, who represents the carrier.

The itemized list of every repair a loss requires, used as the basis for estimating the claim. Disputes over an insufficient scope — line items left out or downplayed — are one of the most common sources of underpaid claims.

A written amendment that changes what a policy covers, adding or removing coverage from the standard form. Always check endorsements before assuming a standard exclusion (like flood or earth movement) does or does not apply.

A cap on a specific type of loss that sits below the policy's overall coverage limit — for example, a policy with a $300,000 dwelling limit might sublimit water backup damage separately at a much lower figure.

A reduction applied to a claim payout when a property was insured for less than the coverage percentage the policy requires (commonly 80% or 90% of replacement cost) — underinsuring the property can shrink every future claim on it, not just a total loss.