Glossary
The words that appear in a property claim, defined the way we would explain them across a kitchen table.
- Actual cash value (ACV)
- The cost to repair or replace the damaged property, less depreciation for age and wear. Many policies pay actual cash value first and the rest when the work is done.
- Additional living expense (ALE)
- The extra cost of living elsewhere while your home is uninhabitable: rent, meals, and the like, above what you would normally spend. Also called loss of use.
- Adjuster
- The person who investigates and evaluates a claim. A staff or independent adjuster works for the carrier. A public adjuster is hired by the policyholder. An appraiser is neither.
- Amount of loss
- What it will cost to repair or replace what was damaged. The one question the appraisal clause exists to answer.
- Appraisal
- The process in a property policy for settling a disagreement about the amount of loss. Each side appoints an appraiser, the appraisers choose an umpire, and any two of the three set the amount.
- Appraiser
- A person appointed by one party to value the loss in an appraisal. The policy requires each appraiser to be competent and impartial, or in some forms disinterested.
- Award
- The written, signed decision of the appraisal panel stating the amount of loss. Signed by both appraisers, or by one appraiser and the umpire.
- Causation
- What caused the damage. Whether a panel may decide it as part of the amount of loss varies by state: yes in Texas, Florida and Iowa, no in Alabama, Mississippi and Tennessee.
- Coverage
- Whether the policy applies to a loss at all. A question for the carrier and, if disputed, the courts. Never for the appraisal panel.
- Declarations page
- The summary page at the front of a policy: named insured, address, coverage limits, deductibles and premium. The appraisal clause is not here; it is in the policy jacket.
- Depreciation
- The reduction in value for age, wear and condition that a carrier subtracts to arrive at actual cash value.
- Disinterested
- Having no financial or personal stake in the outcome. The standard many policies and statutes set for appraisers and umpires.
- Estimate
- An itemized list of the repairs needed, with quantities and unit prices, usually produced in estimating software. Appraisers compare estimates line by line.
- Holdback
- The recoverable depreciation the carrier keeps until repairs are completed. See recoverable depreciation.
- Impartial
- Not favoring either side. The standard in the ISO homeowners form for appraisers and the umpire.
- ISO
- The Insurance Services Office, which drafts the standard policy forms most carriers use, including the HO-3 homeowners form and its appraisal condition.
- Line item
- One entry in an estimate: a task, a quantity and a price. Disagreements in appraisal are resolved line by line.
- Matching
- Whether undamaged materials must be replaced so that repaired areas match the rest. Rules vary by state and policy, and matching is often a large part of a scope dispute.
- Ordinance or law coverage
- Coverage for the extra cost of bringing a repair up to current building code. Often a separate limit.
- Proof of loss
- A sworn statement of the amount claimed, which many policies require within a set time after the carrier requests it. Separate from an appraisal demand.
- Public adjuster
- A licensed professional hired by the policyholder to prepare and negotiate a claim, usually for a percentage of what is paid. An advocate, which is why a public adjuster on the same claim is often not an acceptable appraiser.
- Recoverable depreciation
- Depreciation the carrier withholds at first and pays once the repairs are made, under a replacement cost policy.
- Replacement cost value (RCV)
- The cost to repair or replace with materials of like kind and quality, without deduction for depreciation.
- Reservation of rights
- A letter in which the carrier says it will investigate or pay while reserving the right to deny later. It does not stop appraisal on the amount, but it signals a possible coverage dispute.
- Scope
- What is included in the repair: which rooms, which elevations, which materials, how much of each. Most appraisal disputes are about scope.
- Standard fire policy
- The 1943 New York form that most states adopted as the minimum content of a fire policy. Its appraisal clause, with twenty days for appraisers and fifteen for the umpire, is the ancestor of the clause in your policy.
- Suit limitation
- The deadline in the policy, or in state law, for filing a lawsuit on the claim. Often one or two years from the date of loss. Appraisal usually does not pause it.
- Supplement
- A request for additional payment for damage or costs found after the original estimate.
- Umpire
- The neutral third member of the appraisal panel, chosen by the two appraisers or appointed by a court, who decides the items the appraisers cannot agree on.
- Xactimate
- The estimating software most carriers and appraisers use to price repairs. Working in the same software means the two sides are comparing like with like.
Before you decide anything
Has your claim stalled?
Tell us what happened and where. We will read your policy, tell you plainly whether appraisal fits, and what it would cost. No pressure, and no fee for the conversation.
When you write to us
- 1. We read your policy, the carrier’s estimate, and the letters that came with it.
- 2. We tell you plainly whether appraisal fits your disagreement, and if it does not, who can help.
- 3. If it fits, you have the fee in writing before anything starts.