43 terms
- Actual cash value (ACV)
- Replacement cost minus depreciation. Often the first payment on a replacement cost policy, and the full payment on an ACV policy.
- Additional living expense (ALE)
- Coverage for extra costs of living elsewhere while your home is being repaired. Also called loss of use or Coverage D.
- Agreed value
- An endorsement in which the insurer and the owner agree on a property’s value in advance, usually suspending coinsurance.
- All-risk policy
- A policy that covers physical loss from any cause not specifically excluded. Also called open perils.
- Amount of loss
- The dollar value of the damage. This is what an appraisal panel decides.
- Appraisal award
- The written decision signed by two of the three panel members that sets the amount of loss.
- Appraisal clause
- The policy provision that lets either side demand appraisal when they disagree on the amount of loss.
- Appraiser
- The person each side names to value the loss and work with the other appraiser and the umpire.
- Coinsurance
- A clause requiring you to insure property for a set percentage of its value. Falling short can reduce a claim payment.
- Collateral damage
- Damage to soft metals, screens, vents and other items that helps show hail size, direction and date.
- Cosmetic damage exclusion
- An endorsement, common on metal roofs, that excludes dents or marks that do not affect function.
- Coverage A
- Dwelling coverage for the house itself and attached structures.
- Coverage B
- Other structures coverage for detached garages, sheds, fences and similar buildings.
- Coverage C
- Personal property coverage for contents.
- Declarations page
- The summary page of your policy listing limits, deductibles, endorsements and the policy period.
- Deductible
- The portion of a covered loss you pay before the policy pays.
- Depreciation
- A reduction in value for age, wear and obsolescence.
- Derecho
- A long-lived, widespread windstorm produced by a line of thunderstorms. Eastern South Dakota was hit by one on May 12, 2022.
- Disinterested
- Having no financial or personal stake in the outcome. Many appraisal clauses require appraisers to be disinterested or independent.
- Endorsement
- A written change to a policy that adds, removes or modifies coverage.
- Estimate
- An itemized list of repairs with quantities and prices. Appraisal panels work from line-item estimates.
- Ice dam
- A ridge of ice at the roof edge that traps meltwater, which can then back up under shingles and into the house.
- Ingress
- Water or debris entering a building through an opening, such as one created by wind or hail.
- Line item
- A single entry in an estimate for one task or material, with a quantity and unit price.
- Matching
- The question of whether repairs must reasonably match undamaged areas in color, texture and appearance.
- Mitigation
- Reasonable steps to prevent further damage after a loss, such as tarping a roof or drying a basement.
- Named peril
- A policy that covers only the causes of loss listed in it, common for some farm buildings.
- Ordinance or law coverage
- Coverage for extra costs to meet current building codes during repair or rebuilding.
- Overhead and profit (O&P)
- A contractor’s general costs and margin, often 10% and 10%, added when a project requires coordination of several trades.
- Pitch
- The steepness of a roof, written as rise over 12 inches of run, such as 7/12.
- Proof of loss
- A sworn statement of the amount claimed, which carriers may request within a set time.
- Recoverable depreciation
- Depreciation withheld from the first payment that you can recover after repairs are completed.
- Replacement cost value (RCV)
- 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 says it is handling a claim while reserving the right to deny coverage later.
- Scope
- The list of damaged items and the work needed to repair them.
- Square
- A roofing unit equal to 100 square feet of roof surface.
- Sub-limit
- A lower limit within a policy for a specific type of loss, such as mold, trees or sewer backup.
- Supplement
- A request to add items or increase amounts in the carrier’s estimate, supported by documentation.
- Surplus lines
- Insurance written by carriers not licensed as standard insurers in the state, often used for hard-to-place risks.
- Suit limitation
- The policy clause setting how long you have to file a lawsuit against the insurer.
- Test square
- A marked area of roof, often 10 feet by 10 feet, where hail hits are counted.
- Umpire
- The neutral third member of an appraisal panel who decides items the two appraisers cannot agree on.
- Wind and hail deductible
- A separate deductible for windstorm or hail losses, often a percentage of the dwelling limit.