Insurance Claims Dictionary | ACV, RCV, Umpire & More

Search the dictionary

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

Actual cash value: The value of damaged property at the time of loss, usually figured as replacement cost minus depreciation. Some policies define it differently.
Additional living expense: Coverage for the extra cost of living elsewhere while a home can’t be lived in after a covered loss, subject to policy limits.
Amount of loss: The dollar value of a covered loss. It is the question an appraisal panel is normally asked to decide.
Appraisal award: The written decision that sets the amount of loss, generally binding once signed by two of the three panel members.
Appraisal clause: The policy provision that lets either party demand appraisal when they disagree on the amount of loss and sets out how the process works.
Appraisal demand: The written notice from one party invoking the appraisal clause, usually naming that party’s appraiser.
Coinsurance: A policy condition that can reduce a claim payment if the property was insured for less than a required percentage of its value. More common on commercial policies.
Declarations page: The summary page of a policy listing the insured, property, coverages, limits, deductibles and endorsements.
Deductible: The portion of a covered loss the policyholder pays before the insurer’s payment begins.
Depreciation: A reduction in value for age, wear and condition, subtracted from replacement cost to reach actual cash value.
Derecho: A long-lived, widespread windstorm produced by a line of thunderstorms, capable of straight-line wind damage across a very large area.
Disinterested appraiser: An appraiser with no financial or personal stake in the outcome. Many policies require appraisers to be disinterested, impartial or independent.
Endorsement: A written change to a policy that adds, removes or modifies coverage, such as a sewer backup endorsement.
Estimate review: A line-by-line check of an insurance estimate for missing items, incorrect quantities and pricing that doesn’t reflect local costs.
Exclusion: Policy language that removes a cause of loss or type of property from coverage, such as flood or wear and tear.
Hail bruising: Damage to a shingle from hail impact that may not be obvious at first glance but can loosen granules and weaken the mat.
Holdback: The portion of a replacement cost claim, usually recoverable depreciation, that the insurer withholds until repairs are completed.
Ice and water shield: A self-adhering underlayment installed at eaves, valleys and other vulnerable areas to resist leaks from ice dams and wind-driven rain.
Ice dam: A ridge of ice that forms at a roof’s edge when melting snow refreezes, which can force water under shingles and into the home.
Line item: A single entry in an estimate describing one task or material with its quantity, unit and price.
Matching: The question of whether repaired areas must reasonably match undamaged areas in color, texture or style, and what happens when matching materials aren’t available.
Mitigation: Reasonable steps to prevent further damage after a loss, such as tarping a roof or drying out a basement. Most policies require it.
National Flood Insurance Program: The federal program that provides most flood insurance, which is separate from a standard homeowners policy.
Office of the Commissioner of Insurance: Wisconsin’s insurance regulator, known as OCI, which licenses insurers and agents and handles consumer complaints.
Ordinance or law coverage: Coverage for added costs to bring repaired portions of a building up to current building codes, subject to a limit.
Overhead and profit: A general contractor’s charge for business overhead and profit, often a disputed item when several trades are involved.
Percentage deductible: A deductible set as a percentage of the dwelling coverage limit rather than a flat dollar amount, often applied to wind or hail losses.
Proof of loss: A sworn statement of the amount claimed that some policies require within a set time after a loss or after the insurer’s request.
Recoverable depreciation: Depreciation the insurer will pay back once repairs or replacement are completed, under a replacement cost policy.
Replacement cost value: The cost to repair or replace damaged property with materials of like kind and quality, without a deduction for depreciation.
Reservation of rights: A letter in which the insurer continues handling a claim while reserving the right to deny coverage later.
Roof square: A unit of roofing measure equal to 100 square feet of roof surface.
Scope of loss: The description of what was damaged and what work is needed to repair it, before pricing is applied.
Sewer backup endorsement: An optional addition to a homeowners policy that covers water backing up through sewers or drains, or overflowing from a sump, usually up to a separate limit.
Snow load: The weight of accumulated snow and ice on a roof, which can cause sagging, cracking or collapse when it exceeds what the structure can carry.
Supplement: A request to add or revise items in an insurance estimate after hidden damage is found or omissions are identified.
Test square: A marked 10-by-10-foot area on a roof slope used to count hail hits and assess damage.
Umpire: The neutral third member of an appraisal panel who decides items the two appraisers can’t agree on.
Wisconsin Insurance Plan: Wisconsin’s FAIR plan, offering basic property insurance to owners who can’t obtain it in the regular market.
Xactimate: A widely used estimating software platform for property insurance claims, with regional price lists for labor and materials.

Property Insurance Claims Dictionary