Insurance Claims Glossary

The value of your damaged property at the time of the loss, after accounting for depreciation. ACV = Replacement Cost minus Depreciation. Because older materials are worth less than new ones, ACV settlements are typically lower than RCV settlements. Many policies issue an initial ACV payment and hold back the depreciation until repairs are completed.

The amount it costs to repair or replace your damaged property with new materials of like kind and quality — with no deduction for depreciation. RCV policies pay more than ACV policies. You typically receive an ACV payment first, then the withheld depreciation (recoverable depreciation) is released once repairs are completed and documented.

The difference between the ACV payment and the full RCV amount that your insurer withholds until repairs are completed. Once you finish the work and submit documentation, your insurer releases this additional amount. Not all policies include recoverable depreciation — check your policy or ask us.

The reduction in value of property over time due to age, wear, and obsolescence. Insurance companies apply depreciation to calculate ACV. Depreciation rates vary by material type and age. A 20-year-old roof will have significantly more depreciation applied than a 5-year-old roof.

The amount you are responsible for paying out of pocket before your insurance coverage applies. Some policies have a separate wind and hail deductible — often a percentage of your home's insured value (e.g., 1% or 2%) rather than a flat dollar amount. Always know your deductible before filing a claim.

The process by which your insurance company, after paying your claim, pursues the party responsible for the damage to recover what they paid. You are generally required to cooperate with your insurer's subrogation efforts and must not do anything to impair their right to recover.

A legal agreement that transfers your insurance claim rights to a third party — such as a contractor — allowing them to deal directly with your insurer and receive payment. Be cautious with AOB agreements: once signed, you give up control of your claim. We never ask you to sign an AOB — we work for you, not around you.

A formal, sworn statement submitted to your insurance company documenting the details of your claim — including the date of loss, cause of damage, and the dollar amount claimed. Most policies require this within a specific timeframe. An incomplete or inaccurate proof of loss can jeopardize your claim. We prepare and submit this on your behalf.

The standard used to determine what replacement materials should be used. Materials should be reasonably similar in type, quality, and function to what was damaged — not necessarily identical. Insurers sometimes try to substitute lower-quality materials. We advocate for materials that truly match what you had, including premium brands like IKO shingles and Royal siding.

Steps taken immediately after a loss to prevent further damage — such as emergency board-up, roof tarping, water extraction, or drying. Most policies require prompt mitigation. If your claim is approved, mitigation costs are typically covered. If not approved, you are responsible for those costs. We obtain your full written authorization before any mitigation work begins.

A detailed written document that identifies and quantifies all damage to your property. The scope of loss forms the basis of your claim — it lists every damaged item, the repair or replacement method, and the associated cost. A thorough scope of loss is critical to a fair settlement. We prepare this document using industry-standard estimating software.

A formal dispute resolution process available under most property insurance policies when you and your insurer disagree on the value of a loss. Each party selects an independent appraiser; the two appraisers then select an umpire. The decision of any two of the three is binding. Appraisal is a powerful tool for resolving underpayment disputes.