Insurance Appraisal Terms | Claim Glossary A

Search the terms40 terms

Actual cash value: The value of damaged property at the time of loss, usually replacement cost minus depreciation. Many policies pay this first and the rest after repairs.
Actual cash value holdback: The portion of a replacement cost claim, usually recoverable depreciation, that an insurer withholds until repairs or replacement are completed.
Additional living expenses: Extra costs of living elsewhere, such as rent, hotel bills and added mileage, while a covered loss makes your home unlivable. Often called Coverage D or loss of use.
Amount of loss: The dollar value of the damage under the policy’s valuation terms. This is what appraisal decides.
Appraisal award: The written decision that sets the amount of loss, signed by any two of the two appraisers and the umpire.
Appraisal clause: The policy provision that lets either party demand appraisal when they disagree on the amount of loss and describes how the process works.
Appraisal demand: The written notice one party sends the other to invoke the appraisal clause.
Contents inventory: A room-by-room list of damaged or destroyed personal property with descriptions, ages, quantities and replacement prices.
Coverage A, B, C and D: Common homeowners policy sections: A is the dwelling, B is other structures, C is personal property and D is loss of use or additional living expenses.
Declarations page: The summary page of a policy that lists the named insured, property address, coverage limits, deductibles and policy period.
Deductible: The part of a covered loss you pay before the insurer pays. It may be a flat dollar amount or a percentage of a coverage limit.
Depreciation: The reduction in value for age, wear and condition that separates actual cash value from replacement cost.
Drip edge: Metal flashing installed along roof edges to direct water into the gutters and away from the fascia. Whether it is required can depend on local code.
Earth movement exclusion: Policy language that excludes damage from earthquakes, landslides, sinkholes, subsidence and similar ground movement unless an endorsement adds coverage.
Holdback: Money the insurer withholds from a payment, most often recoverable depreciation, until a condition such as completed repairs is met.
Ice and water shield: A self-adhering waterproof underlayment applied at eaves, valleys and penetrations to protect against ice dams and wind-driven rain.
Kentucky FAIR Plan: The property insurer of last resort for Kentucky owners who cannot find coverage in the regular market.
Line item: A single priced entry in an estimate, such as a quantity of shingles, a labor task or a fee.
Matching: The question of whether replaced materials must reasonably match undamaged materials, which depends on policy language and the facts.
Mine subsidence: Ground sinking caused by the collapse of underground mine workings, which standard policies usually exclude unless separate coverage applies.
Mitigation: Reasonable steps to prevent further damage after a loss, such as tarping a roof or drying out a wet room. Most policies require it.
Mortgagee clause: The policy provision that protects the lender’s interest, which is why mortgage companies are often named on claim checks.
Named insured: The person or entity listed on the declarations page as the policyholder.
Ordinance or law coverage: Coverage for added costs to repair or rebuild to current building codes, usually subject to a separate limit.
Overhead and profit: A contractor’s charge for running the business and earning a margin, commonly added when a job needs a general contractor to coordinate several trades.
Party appraiser: The appraiser each side selects in an appraisal. Most policies require this person to be competent and impartial.
Percentage deductible: A deductible equal to a percentage of a coverage limit, often the dwelling limit, commonly used for wind or hail losses.
Proof of loss: A sworn statement of the amount claimed that some policies require within a set time after the insurer asks for it.
Recoverable depreciation: Depreciation the insurer will pay back once you complete repairs or replacement under a replacement cost policy.
Replacement cost value: The cost to repair or replace damaged property with materials of like kind and quality, without deducting depreciation.
Reservation of rights: A letter in which the insurer continues handling a claim while saying it may later deny coverage for some or all of it.
Scope of loss: The description of what is damaged and what work is needed to repair it, before pricing is applied.
Square (roofing): A unit of roof area equal to 100 square feet.
Steep charge: An added labor charge for working on roofs above a certain pitch, where extra safety measures slow the work.
Subrogation: The insurer’s right, after paying a claim, to recover its payment from a third party who caused the loss.
Suit limitation: The policy clause that sets how long you have to file a lawsuit against the insurer. Kentucky law limits how short it can be.
Supplement: A request for additional payment for damage or costs discovered after the original estimate, often during repairs.
Tear-off: Removing existing roofing layers down to the deck before installing a new roof.
Umpire: The neutral chosen by the appraisers, or appointed by a court, to decide items the appraisers cannot agree on.
Xactimate: Estimating software widely used by insurers and contractors that prices line items using regional price lists.

Insurance Appraisal Terms, Defined in Plain English